OpenAI might have its own AI chips in the works

ChatGPT and OpenAI phones

OpenAI, the company behind ChatGPT, is reportedly planning to make its own AI chips. Given the current chip shortage and the growing demand for AI chips, the tech giant cloud has a great chance of success.

Everything revolves around chips these days. All electronic devices, home appliances, cars, and airplanes use chips to operate. The chips have also become a strategic and national security matter for the United States and China. The market is currently dealing with a massive shortage and the Taiwan crisis has worsened the outlook. Thus, chip companies are investing tens of billions of dollars to ramp up production and meet the demands.

In the meantime, demands for AI chips are skyrocketing as they’re essential for AI-driven services and products. Nvidia is now the leader of this segment, but a new player might come to the game. ChatGPT’s parent company, OpenAI, might soon become an AI chip producer.

OpenAI diversifies its portfolio by focusing on producing AI chips

As Reuters reported, OpenAI is still evaluating the idea and hasn’t moved forward with it yet. The company’s strategy for entering AI chip production is also vague. Two options are available. First, OpenAI can acquire a smaller chip producer and start producing its chips. This plan might require plenty of money and other resources.

The second option is cheaper, and it’s outsourcing. The AI chips leader, Nvidia, is outsourcing over half of its AI hardware production to Foxconn. OpenAI can also follow the same path and benefit from cheap labor and existing production facilities in Southeast Asia.

Despite investments in new production lines, the chip market suffers from a shortage. Political tensions are also making everything worse, as Taiwan is the biggest chip producer in the world. Any unrest in Taiwan could throw the supply chain into crisis. To mitigate risks, OpenAI could start working with other AI hardware manufacturers besides launching its production lines.

OpenAI’s interest in producing in-house AI chips coincides with its CEO’s meeting with former Apple designer Jony Ive. Both reportedly talked about building AI hardware, which is still mysterious to everyone.