The rumored ambitions of OpenAI CEO Sam Altman to construct an AI processor that will create AI chips internally was one of the more surprising tales of the previous week. On Tuesday, the Financial Times disclosed some further details regarding the project: Although Altman genuinely seeks to create his own substitute for Nvidia’s AI and HPC GPUs, he is discussing chip manufacturing with TSMC.

OpenAI CEO Altman is reportedly in talks to launch a new chip company with TSMC and Middle Eastern investors to lessen OpenAI‘s reliance on Nvidia (or rather, Azure datacenters that run Nvidia’s H100, which Microsoft purchases in bulk) and meet the company’s increasing processing power needs.

This ambitious effort, headed to change OpenAI’s approach to AI model creation and hardware usage, incorporates notables such as Sheikh Tahnoon bin Zayed al-Nahyan of the United Arab Emirates. With this endeavor, OpenAI will strive to join the ranks of businesses like Google and Amazon Web Services, which create custom chips for AI applications. Given the objective of taking on the industry titan Nvidia, the financial stakes in this endeavor are substantial. Altman needs funding since creating such sophisticated processors from the ground up is anticipated to cost hundreds of millions if not billions.

The main topic of Altman’s talks is getting money from some of the wealthiest Middle Eastern investors.

Sheikh Tahnoon bin Zayed al-Nahyan (national security advisor) and one of Abu Dhabi’s most influential people are critical players in these negotiations. He is in charge of large assets since he is the president of the UAE’s brother and a significant player in the nation’s commercial and investment scene. In addition to chairing the International Holding Company and the ambitious AI startup G42, which has already forged collaborations with Microsoft and OpenAI, they include the Abu Dhabi Investment Authority and ADQ.

In addition, Altman and TSMC are negotiating over the processors. For Altman’s chip company, this possible relationship with the Taiwanese foundry is essential because TSMC is one of the few semiconductor contract makers with state-of-the-art process technologies. However, Altman must haggle to obtain a suitable capacity because TSMC’s advanced chip production capacity is constrained.

We are unsure about the organizational structure of Altman’s new venture and if it will operate as a separate company or an OpenAI subsidiary. Nonetheless, it seems evident that OpenAI will be the venture’s principal client anyway, suggesting a tight working relationship.

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Deanna Ritchie

Managing Editor at ReadWrite

Deanna is an editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind, Editor in Chief for Calendar, editor at Entrepreneur media, and has over 20+ years of experience in content management and content development.