OpenAI's Sam Altman reportedly left the company late last year amid internal "court strife" as he struggled to raise billions of dollars in new investment, and returned to the helm of one of the world's leading artificial intelligence companies in an equally dramatic fashion. As early as November 2023, there were reports that Sam Altman was trying to raise funds for a new enterprise in the Middle East that would subvert Nvidia's dominance in the field of artificial intelligence chips in due course.
Once this new company is established, it will not only be able to replace Nvidia at a low cost, but also significantly reduce OpenAI's chip procurement costs.
Today, Bloomberg adds new color to previous reports, reporting that Sam Altman is now seeking the huge funding necessary to build a dedicated wafer fab network by approaching global investors such as Abu Dhabi's G42 and Japan's SoftBank.
According to Bloomberg, Altman is trying to win over "top chip manufacturers" for this purpose, which may include TSMC and Samsung. Still, these talks are in their early stages, so many details remain vague.
To compete with Nvidia, building state-of-the-art chip manufacturing plants is a resource-intensive task, which is in sharp contrast to the relatively economical approach adopted by Google, Microsoft and Amazon, whose artificial intelligence chips are designed in-house and then outsourced to powerful third parties for manufacturing. Sam Altman has reportedly been in talks to raise $8 billion to $10 billion from G42, which speaks volumes about the scale of the effort.
However, these preliminary negotiations may be complicated by unrelated developments. Abu Dhabi’s G42 Artificial Intelligence Fund, for example, came under scrutiny from some members of Congress this month for its alleged ties to blacklisted Chinese entities, including Huawei and the Beijing Genomics Institute of the Chinese Academy of Sciences.
OpenAI's annual revenue will reach $1.6 billion in 2023. The company is seeking new financing at a valuation of about $100 billion.