MGX, a newly established investment company from Abu Dhabi, is in talks to finance Sam Altman's ambitious plan to build excessive semiconductor manufacturing capacity for AI processors, reports the Financial Times. If the talks succeed, the move will be in line with the United Arab Emirates' strategy to become a key player in the global artificial intelligence industry.
OpenAI's push to develop its semiconductors is driven by the need to reduce dependency on Nvidia's AI GPUs, such as the H100. Meanwhile, besides developing AI processors, Sam Altman wants to ensure their steady supply to OpenAI and potentially other companies. After witnessing two major semiconductor supply crises in recent years (first for the automotive and PC industries and then for the AI industry), he seems to believe that traditional contract makers of chips do not have sufficient manufacturing capacities to fulfill the global demand for AI chips. As a result, he allegedly wants more fabs to be built.
OpenAI's CEO, Sam Altman, has reportedly estimated that the cost of building new semiconductor manufacturing facilities and supporting infrastructure could reach up to $7 trillion. While it is still unclear whether the chip venture is an OpenAI project or Sam Altman's project (most likely the latter), the CEO has been touring around the world talking to chipmakers and seeking support from nation-states, including discussions with Singapore's Temasek, as traditional venture capitalists are unlikely to invest such vast sums.
MGX, an AI-focused fund launched by the UAE, is chaired by Sheikh Tahnoon bin Zayed al-Nahyan, the national security adviser. The fund aims to make Abu Dhabi a central hub for AI development, leveraging the country's financial resources and political backing. The UAE's ambition to become a global AI powerhouse is evident in its efforts to attract leading figures in the AI industry, including Elon Musk, who has expressed interest in partnering with the Gulf state for his AI venture, xAI.
Sheikh Tahnoon's role extends beyond chairing MGX. He also leads G42, an AI-focused holding from the UAE, backed by Abu Dhabi's sovereign investment fund Mubadala. G42 has established partnerships with major players in the AI industry, including OpenAI, Microsoft, and Cerebras. The establishment of MGX, in collaboration with G42 and Mubadala, is another AI-related strategic move from Abu Dhabi.
The UAE's proactive approach to AI is highlighted by its early adoption of AI initiatives, such as appointing the world's first AI minister in 2017 and opening an AI-focused graduate university in 2019. These efforts demonstrate the country's dedication to advancing its position in the AI industry.
However, the UAE's AI ambitions come amid a complicated geopolitical landscape, such as the U.S.-China trade tensions that extend well beyond trade to national security grounds. G42 has had to reassess its partnerships with Chinese companies, including Huawei, in response to concerns from the U.S.
