Tech entrepreneur Sam Altman is seeking $5 trillion to $7 trillion in financing to fund the production of microchips to increase the availability of AI and machine learning, the Wall Street Journal reported on February 8.
The funds will be used to set up factories or finance existing chip manufacturing companies, with OpenAI acting only as a “critical customer.” This effort is not aimed at raising funding for Altman’s OpenAI, best known for its ChatGPT chatbot and GPT large language model (LLM).
Sources told the newspaper that the fundraising could be largely financed by debt and could take years to complete.
potential investor
To finance the project, Altman reportedly sought investment from a list of little-known investors.
Altman is known to have discussed this business with SoftBank, Taiwan Semiconductor Manufacturing Company (TSMC), and Microsoft, but it is unclear whether these companies will participate as investors or take on other roles. Sources also said the UAE was part of the talks and could be a potential investor.
Altman reportedly met with U.S. Commerce Secretary Gina Raimondo to discuss the issue, as the government must approve such projects. However, there are concerns that the UAE’s intervention could become an obstacle.
The Journal noted that U.S. lawmakers called on the Commerce Department in January to investigate G42, an AI company based in Abu Dhabi. OpenAI entered into a partnership with G42 in October 2023.
Solving chip shortage problem
The Journal’s report noted that because the trillion-dollar goal is “absurdly large,” Altman’s fundraising plans “face significant obstacles” and “may not ultimately succeed.”
Altman’s efforts could solve the widely publicized chip shortage problem, according to the paper. However, the report noted that his fundraising targets are larger than those of most sovereign debt and sovereign wealth funds. This will be worth more than the entire chip industry by the end of 2023.
Global chip sales amount to $527 billion annually and are expected to reach $1 trillion as early as 2030. Meanwhile, semiconductor manufacturing equipment sales account for another $100 billion annually.
OpenAI has been vocal about the shortage and said in October that it was considering manufacturing its own chips to address the issue. The effort could help OpenAI raise $100 billion, according to a January report.
It’s unclear whether these plans overlap with the $1 trillion fundraising plan reported by the Journal. Although third-party companies are responsible for production, other companies including Meta, Microsoft, Google, and Amazon have also begun designing their own chips.