OpenAI is finalizing the design of its first in-house artificial intelligence (AI) chip within a few months. The company plans to send it to TSMC for fabrication – an audacious move to reduce its dependence on NVIDIA Corp.
The maker of ChatGPT is on track to meet its ambitious goal of mass production in 2026, according to a Reuters report on Monday.
TSMC will be manufacturing the chip with its advanced 3-nanometer (nm) process technology, the report added. If all goes well with its first-designed chip, OpenAI will have a potential alternative to NVIDIA’s.
OpenAI’s in-house team is developing the chip with Broadcom Inc.’s Richard Ho, who joined OpenAI more than a year ago after leading Alphabet Inc.’s Google’s custom AI chip program, and heads the 40-person OpenAI team, according to Reuters.
The chip under development is capable of training and running AI models, Reuter reported, but will initially be used for running AI models. OpenAI plays to deploy the chip on a limited scale within its infrastructure.
OpenAI and TSMC declined to comment on the report.
OpenAI’s chip endeavor comes as Microsoft Corp. and Meta Platforms Inc. explore their own silicon or third-party options amid rising costs and reliance on NVIDIA as a single supplier. The Silicon Valley and Wall Street darling commands 80% of the market.
But the costs of a new chip design are steep: A large-scale program for a single version of a chip runs into the hundreds of millions of dollars range, and the price tag could double if you count the costs to building software and peripherals that support the chip.
During its recent quarterly revenue report, Microsoft said it will spend $80 billion on AI infrastructure in 2025. Meta has vowed to splurge $65 billion in the next year on building out its AI operations.
OpenAI has major plans to build out AI infrastructure beyond chip design. It, along with SoftBank and Oracle Corp., are major partners in Stargate, a $500 billion infrastructure program announced by President Donald Trump last month to build massive data centers in the U.S. as energy demands skyrocket because of AI expansion.
Elon Musk, an adviser to Trump and head of rival xAI, said Stargate lacks any substantial funding. On Monday, he and a team of investors said they made a $97.4 billion bid to acquire the non-profit entity that controls OpenAI, a company Musk co-founded in 2015 but since has sued.
