Sam Altman, OpenAI’s Chief Executive Officer (CEO) is talking to different officials in the Middle East to raise billions of dollars, aiming to enhance the global capacity for creating advanced semiconductors and supporting artificial intelligence (AI).
According to a Wall Street Journal report, Altman’s ambitious initiative aims to secure nearly $7 trillion for this purpose. He is proposing to investors the idea of building numerous semiconductor foundries. Once constructed these facilities would be overseen by existing chip manufacturers such as Taiwan Semiconductor Manufacturing Company (TSMC).
Altman’s main plan aims to solve the problems limiting OpenAI’s growth, particularly the shortage of semiconductors essential for powering AI models like ChatGPT.
Many countries have expressed intentions to boost their semiconductor production. However, the majority of the world’s semiconductor supply is still controlled by a few companies, like Taiwan Semiconductor Manufacturing Company (TSMC) and California-based NVIDIA.
Despite gaining attention after the release of ChatGPT, Sam Altman faced challenges and was briefly removed from his position at the AI firm in November. However, he was reinstated a few days later following protests from staff and investors. Recently, Sam Altman has proposed the idea of constructing numerous chip-fabrication plans in the next few years with funding from Middle East investors.
The report mentions that Altman has been meeting with top officials, including Masayoshi Son, the CEO of SoftBank executives from TSMC, and United States Secretary of Commerce Gina Raimondo.
There is a rough estimate that the project could require raising as much as $7 trillion, citing people familiar with this idea and this estimate is roughly a trillion dollars more than the market value of one of the two largest companies Apple and Microsoft combined.
The Semiconductor Industry Association (SIA) has forecast a 13.1 % jump in global chip sales to $595.3 billion this year, compared with a drop of about 8% in sales in 2023.
The amounts Sam Altman is talking about are relatively high compared to typical corporate fundraising as per the report. Investors have estimated the value of OpenAI at over $80 billion.
An OpenAI spokesperson told the journal that the company has had a very productive discussion about increasing global infrastructure and supply chains for chips, energy, and data centers. Both Financial Times and Bloomberg have also reported on some of Altman’s meetings in recent weeks.
If we compare this real-world revenue of TSMC with Altman’s proposed plan for his upcoming semiconductor plans, the numbers just don’t add up. However, considering the global shift towards AI, OpenAI might be anticipating this trend well in advance. Nevertheless, it will be interesting to see how Altman manages to navigate through this.