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Tuesday, February 13, 2024

Sam Altman Seeks $7 Trillion to Supercharge Chip Manufacturing 


OpenAI Chief Sam Altman is reportedly looking for to lift trillions of {dollars} to handle the large world scarcity in semiconductor chips. The continued ship scarcity is partly prompted by the quickly rising demand for GenAI. The chips are used to coach the newest massive language fashions (LLMs). 

The Wall Avenue Journal reported that Altman is reaching out to numerous traders, together with the United Arab Emirates (U.A.E), to lift $7 trillion for a extremely bold tech initiative that will enhance the world’s provide of semiconductor chips. 

Massive tech firms have lengthy complained in regards to the shortages of chips such because the Nvidia H100, probably the most fashionable AI chips in the marketplace. The scarcity and steep value of AI chips have led a number of massive tech firms to put their very own AI chips on the desk

(Iaroslav Neliubov/Shutterstock.com)

If Altman is profitable in his bold plans to lift trillions of {dollars}, he might assist enhance the world’s chip-building capability and make the worth of AI chips extra aggressive. 

U.A.E has been on the forefront of AI funding within the Center East. In accordance with a latest PWC report, the impression of AI for the area is forecasted to be round $320 billion. Altman has been fast to capitalize on this rising curiosity within the UAE. He has met with a number of senior authorities officers within the nation together with the nation’s nationwide safety advisor Sheikh Tahnoun bin Zayed al Nahyan. He’s additionally the brother of President Mohamed bin Zayed al Nahyan. 

As a part of his fundraising marketing campaign, Altman additionally met with different key gamers within the trade together with Taiwan Semiconductor Manufacturing Co. (TSMC) and SoftBank. 

With the rising prevalence of AI methods, the demand for AI chips is more likely to proceed rising. Nevertheless, the large quantity of funding that’s being sought by Altman would dwarf the present measurement of the worldwide semiconductor trade, which had gross sales of $527 billion final yr and is predicted to achieve $1 trillion by 2030.  

The $7 trillion determine is staggeringly massive, particularly when it comes to company fundraising. Even some large sovereign wealth funds would fail to match it. 

Simply to offer some perspective into how massive this sum is, the full U.S. company bond issuance in 2023 was $1.44 trillion, in accordance with the Securities Business and Monetary Markets Affiliation (SIFMA). The mixed worth of Apple and Microsoft, the 2 highest-valued firms within the U.S., is round $6 trillion. 

“OpenAI has had productive discussions about growing world infrastructure and provide chains for chips, power, and knowledge facilities—that are essential for AI and different industries that depend on them,” stated an OpenAI spokeswoman. “We are going to proceed to maintain the U.S. authorities knowledgeable given the significance to nationwide priorities, and look ahead to sharing extra particulars at a later date.”

Altman has been actively investing in startups that may make inexpensive power from nuclear fission and this aligns effectively along with his fundraising efforts for the chips. The AI amenities devour monumental quantities of electrical energy and this voracious power urge for food makes them a menace to the setting. In accordance with Altman, the way forward for AI relies on breakthroughs in clear power. 

The fundraising plans would require Atlamn to influence world companions and governments to put money into extra energy-efficient AI {hardware}. It’s reported that Altman is pitching a partnership between OpenAI, chip makers, energy suppliers, and different traders to construct chip foundries. The total checklist of traders isn’t recognized, nonetheless, we will anticipate this effort to span years and extra traders are more likely to come on board. 

(Adam Flaherty/Shutterstock)

Whereas the discussions with the traders are at an early stage, Altman and his crew have a stiff problem forward. The geopolitical battle between the U.S. and China for tech dominance provides extra complexity to Altman’s ambitions to unite world companions in addressing the AI chip scarcity. 

One other problem for Altman is to persuade potential traders to construct the chip factories within the U.S., however the scarcity of expert employees and excessive labor prices would make that difficult.  The U.S. authorities may also be reluctant to have overseas traders or governments have main management over the essential semiconductor sector. 

Altman’s plans are being known as “wildly bold” and “optimistic”, nonetheless, if he’s to succeed, it is going to change your entire dynamics of the market. 

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