Sam Altman Eyes Chip Venture with Middle East, TSMC Amid OpenAI Growth

OpenAI CEO Sam Altman is in talks with Middle Eastern investors and chip fabricators, including TSMC, about starting a new chip company, the Financial Times reported Saturday.

OpenAI's Sam Altman Talks With Middle East Supporters About Semiconductor Initiative

Sam Altman is in talks with Middle Eastern investors and chip fabricators, including TSMC, about creating a new chip venture, as the OpenAI CEO attempts to meet his company's rising demand for semiconductors while reducing its dependency on NVIDIA, as per FT.

According to those familiar with the discussions, Altman has spoken with some of the region's wealthiest investors about supporting the ambitious new initiative to produce chips required to train and build AI models, as well as the plants needed to manufacture them.

The 38-year-old entrepreneur is in talks with investors in the United Arab Emirates, including Sheikh Tahnoon bin Zayed al-Nahyan, one of Abu Dhabi's wealthiest and most prominent personalities, about funding the initiative, according to sources.

According to reports, he is also in talks with Taiwanese chipmaker Taiwan Semiconductor Manufacturing Co regarding a cooperation to manufacture the chips.

OpenAI and TSMC declined to comment. Sheikh Tahnoon was not immediately available for comment. Bloomberg originally reported that Altman was discussing a chip partnership with Middle Eastern investors.

Sheikh Tahnoon is a brother of the UAE's president, Sheikh Mohammed bin Zayed al-Nahyan, and serves as his national security adviser. He also runs a rapidly expanding commercial empire and leads many of Abu Dhabi's most powerful governmental investment funds.

These include the $800 billion Abu Dhabi Investment Authority and ADQ, a state investment entity. He also serves as chairman of International Holding Corporation, a massive conglomerate that has quickly become the UAE's largest publicly traded corporation, as well as G42, an ambitious AI firm with relationships with Microsoft and OpenAI.

It is unclear how much Altman hopes to fund for his new firm, but designing and developing chips is a costly endeavor, and competing with Nvidia, which has a market capitalization of over $1.5 trillion, is expected to cost billions of dollars.

Chips have become the trendiest commodity for start-ups in Silicon Valley and established technology organizations overseas in the last year, elevating a few big chipmakers to the position of kingmakers in the fight for AI supremacy.

Increasingly powerful semiconductors, particularly Nvidia's graphics processing units, or GPUs, have served as the foundation for the artificial intelligence revolution.

OpenAI and other major businesses use thousands of chips to train and run their massive language models, and the rivalry for GPUs is severe. A few large businesses have strong control over the supply of semiconductors.

OpenAI is developing a new edition of its AI model, which is scheduled to be released this year and represents a significant increase over its most recent offering, GPT-4. Upgrades to each model increase the company's reliance on its partners' chips.

It is unclear whether Altman's chip company will be run as a subsidiary of OpenAI or as a separate entity. According to two people familiar with the arrangements, OpenAI would serve as the new company's primary customer.

OpenAI CEO Sam Altman Was Fired In November 2023 Following A Board Debate

OpenAI's sacking of Sam Altman in November was reportedly the result of wide-ranging conflicts between the CEO and his board, particularly Ilya Sutskever, an OpenAI co-founder and chief scientist, Japan Times reported.

The disagreements included differing views on AI safety, the speed of technological progress, and the company's commercialization, according to the source, who asked not to be identified because they were talking private information.

Altman's ambitions may have also been a factor in the divorce. According to a source familiar with the investment plan, Altman is aiming to raise tens of billions of dollars from Middle Eastern sovereign wealth funds to launch an AI chip firm that will compete with Nvidia Corp. processors.

Altman was also recruiting SoftBank Group chairman Masayoshi Son for a multibillion-dollar investment in a new company that would create AI-focused gear in collaboration with veteran Apple designer Jony Ive.

Sutskever and his allies on the OpenAI board may have been allegedly turned off by Altman raising funds in the name of OpenAI and the fact that these new firms do not share the same governance model. In a statement, former OpenAI President Greg Brockman said that he and Altman were astonished by the company's decision.

Photo: The Economist/YouTube Screenshot