Home OpenAI’s potential $51M investment in Rain AI raises ethical and security concerns

OpenAI’s potential $51M investment in Rain AI raises ethical and security concerns

Following the recent turmoil at OpenAI, new reporting has brought to light a 2019 agreement between OpenAI and Rain AI, an AI-chip manufacturing startup. According to WIRED, which first reported this news, the letter of intent reviewed includes OpenAI’s non-binding commitment to purchase $51 million worth of AI chips from Rain AI once developed. Sam Altman, who had personally invested over $1 million in Rain AI, was overseeing OpenAI at the time.

Unnamed sources allegedly told WIRED that Altman’s personal pursuits with various projects throughout Silicon Valley and the distractions they might cause played a role in his dramatic ouster late last month.

Rain AI, located near OpenAI’s headquarters in San Francisco, is developing what it calls neuromorphic processing units (NPUs) designed to mimic the human brain. The deal, signed in 2019, was part of OpenAI’s efforts to secure advanced technology for its AI projects, despite Altman’s personal investment in Rain AI raising concerns about his entangled interests.

Founded in 2017, Rain AI aims to revolutionize AI development with its NPUs, claiming to offer substantially more computing power and energy efficiency than traditional GPUs. The startup, which Altman supported in its early stages, now comprises a team of experts in both AI algorithm development and traditional chip design.

Rain AI’s initial chips, based on the RISC-V open-source architecture, target edge devices like phones, drones, cars, and robots. The company’s goal is to provide chips capable of both training machine algorithms and running them post-deployment, a significant advancement in AI chip technology.

Security concerns and CFIUS scrutiny of Rain AI

Rain AI’s development of NPUs, promising significant improvements in computing power and energy efficiency, has been a subject of interest for OpenAI. However, Rain AI’s funding and investment background have raised security concerns. The U.S. Committee on Foreign Investment (CFIUS) intervened when Prosperity7 Ventures, a Saudi Arabia-affiliated fund, invested in Rain AI. CFIUS’s involvement led to the fund being mandated to divest its stake in Rain AI, reflecting the national security risks associated with foreign investments in critical technology sectors.

This divestment, along with a reshuffling of Rain AI’s leadership, could potentially delay the startup’s progress in bringing its novel chip technology to market. Such a delay might impact OpenAI’s ability to utilize Rain AI’s technology for its AI projects.

Rain AI’s funding, totaling $33 million as of April 2022, has been sufficient for its operations through early 2025. However, the forced divestment from Prosperity7 Ventures and the subsequent acquisition of shares by Silicon Valley-based Grep VC have added complexity to Rain AI’s journey.

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Maxwell Nelson
Tech Journalist

Maxwell Nelson, a seasoned journalist and content strategist, has contributed to industry-leading platforms, weaving complex narratives into insightful articles that resonate with a broad readership.

Get the biggest tech headlines of the day delivered to your inbox

    By signing up, you agree to our Terms and Privacy Policy. Unsubscribe anytime.

    Tech News

    Explore the latest in tech with our Tech News. We cut through the noise for concise, relevant updates, keeping you informed about the rapidly evolving tech landscape with curated content that separates signal from noise.

    In-Depth Tech Stories

    Explore tech impact in In-Depth Stories. Narrative data journalism offers comprehensive analyses, revealing stories behind data. Understand industry trends for a deeper perspective on tech's intricate relationships with society.

    Expert Reviews

    Empower decisions with Expert Reviews, merging industry expertise and insightful analysis. Delve into tech intricacies, get the best deals, and stay ahead with our trustworthy guide to navigating the ever-changing tech market.