Sam Altman, chief executive officer of OpenAI, is reportedly raising funds to build semiconductor production facilities to make processors for artificial intelligence (AI) applications, reports Bloomberg. He believes that AI technologies will become pervasive enough to support their own semiconductor supply chain in the years to come. Naturally, this venture would compete against players like Intel, TSMC, and Samsung Foundry.
OpenAI, which currently uses Nvidia's A100 and H100 GPUs for its popular Chat GPT service, has been exploring ways to develop its own AI processors for a while, according to a report published in October. Designing its own AI silicon would align with trends set by Amazon Web Services, Google, Microsoft, and many other hyperscalers, who prefer to build their own processors in addition to buying off-the-shelf products.
But apparently, Sam Altman wants to do something different: to build a 'network of AI chip factories,' as Bloomberg describes it. The venture, involving discussions with potential investors like Abu Dhabi-based G42 and SoftBank Group, aims to address the ongoing and anticipated AI-related chip supply shortage. Apparently, Altman believes that established foundries like TSMC, Samsung Foundry, and Intel Foundry Services will be unable to meet the demand for AI-oriented chips in the coming years.
The financial and operational scale of this project is substantial, to say the least. According to the report, the discussions with G42 alone centered on raising between $8 billion to $10 billion. The project's full scope and list of partners are still in the early stages of development, indicating the massive investment and time required to establish a network of such facilities. The report does not detail whether Altman plans to buy an established foundry to produce AI chips or build an all-new network of fabs catering to the needs of OpenAI and potentially its partners.
A 2nm or 3nm class process technology costs billions of dollars to develop, and the costs are rising as fabrication nodes get smaller. Meanwhile, a modern fab capable of making chips on a 3nm or 2nm-class node in large volumes can cost $30 billion today. Fab costs are also rising quickly now that a single Low-NA EUV lithography tool costs around $200 million, and a High-NA litho machine is expected to cost from $300 million to $400 million. In the coming years, one will need multiple Low-NA and High-NA machines in a leading-edge fab to make leading-edge chips for AI and HPC applications.
Whether or not Altman can raise tens or hundreds of billions for fabs and then maintain them and ensure that they produce chips on the leading-edge nodes is something that only time will tell. Yet, without any doubt, his effort could disrupt the foundry market.
