Sam Altman is reportedly raising billions for chip manufacturing factories – Here’s why that matters

Innovation

OpenAI CEO Sam Altman is in the process of setting up fundraising for a network of semiconductor manufacturing factories, according to a new report, amid a multi-billion dollar production race for the chips—technology critical for the production of consumer goods and AI products.
Sam Altman OpenAI Microsoft Illustrations

Altman founded OpenAI in 2015. (Photo by Jaap Arriens/NurPhoto via Getty Images)

NurPhoto via Getty Images

Key Facts

Altman has been speaking with large potential investors who would help fund the chip plant network, Bloomberg reported, citing unnamed people familiar with the conversations.

Investment firms such as Abu Dhabi-based technology group G42 and Tokyo-based SoftBank Group are some of the firms in communication with Altman about the project, Bloomberg added, noting that it would involve top chip manufacturers.

Further details about Altman’s aims with the early-stage project are scant, though its potential success could play a role in the ongoing chip war between the U.S. and China, both of which are seeking to bolster their production of chips for applications in the AI, military and consumer goods sectors.

It is unclear where the chip plants would be located, but basing them in the U.S. could help the country’s manufacturing power, as it currently manufactures around 12% of the world’s chips domestically and relies heavily on outsourcing as a cost-saving measure.

Altman’s project would also likely come to fruition alongside increasing demand for chips in the near to mid-future, as the use of semiconductors in vehicles increases and geopolitical trade risks continue to persist, according to S&P Global.

OpenAI, G42 and SoftBank did not immediately respond to Forbes’ request for comment.

Big Number

$48 billion. That’s how much semiconductor revenue was posted in November, Bloomberg reported, marking a 5.3% increase from the year before.

Key Background

Semiconductors are tiny modules, processors and other types of chips found within electronics such as automobiles, medical devices, computers, weaponry, phones and clean energy systems. The U.S. has poured billions into the semiconductor industry, with dozens of companies including Intel and Qualcomm pledging nearly $200 billion for chip manufacturing projects between 2020 and 2023, the New York Times reported.

President Joe Biden signed the bipartisan CHIPS and Science Act in 2022, which directed $280 billion in spending over the next ten years for semiconductor research and development, manufacturing, and supply chain commitments. The Biden administration has also put export restrictions on chips and chipmaking tools to China as government concern around Beijing’s military and artificial intelligence developments rises. China, which holds the advantage of owning an abundance of natural resources needed to produce chips, could face further restrictions this year, according to NBC News, which cited Dan Hutcheson, vice chair and senior research fellow at semiconductor intelligence firm TechInsight.

This article was first published on forbes.com and all figures are in USD.

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