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OpenAI Explores Developing Its Own AI Chips

Updated: Jan 8

OpenAI, the company behind ChatGPT, is reportedly considering the development of its own artificial intelligence (AI) chips.

Creditd: REUTERS

Sources familiar with the matter have revealed that OpenAI has even evaluated a potential acquisition target as part of its exploration.

While the company has not made a final decision, internal discussions have been ongoing for at least a year to address the shortage of expensive AI chips that OpenAI relies on.

Options being considered include building its own AI chip, collaborating more closely with chipmaker Nvidia and diversifying its suppliers beyond Nvidia.

OpenAI CEO Sam Altman has emphasised the acquisition of more AI chips as a top priority for the company. Altman has expressed concerns about the scarcity of graphics processing units (GPUs), which are essential for running AI applications. Nvidia currently dominates the market, controlling over 80% of the global market share for AI chips.

The shortage of advanced processors and the high costs associated with running the necessary hardware have prompted OpenAI to seek alternative solutions. Since 2020, OpenAI has been using Microsoft's supercomputer, equipped with 10,000 Nvidia GPUs, to develop its generative AI technologies. However, running ChatGPT is a costly endeavor, with each query estimated to cost around 4 cents.

Developing its own AI chips would place OpenAI in the company of tech giants like Google and Amazon, who have already ventured into designing their own chips. However, building custom chips would require a significant investment, potentially amounting to hundreds of millions of dollars annually.

While OpenAI has considered the possibility of acquiring a chip company to expedite the process, the identity of the potential acquisition target remains undisclosed. Even if OpenAI proceeds with developing custom chips, it is expected to take several years, leaving the company reliant on commercial providers like Nvidia and Advanced Micro Devices (AMD) in the interim.

Some tech companies that have pursued their own chip development have faced challenges. Meta, for example, encountered issues with its custom chip efforts and had to abandon some of its AI chips. OpenAI's main backer, Microsoft, is also reportedly working on a custom AI chip that OpenAI is testing, potentially signaling a further divergence between the two companies.

The demand for specialised AI chips has surged since the launch of ChatGPT. These chips, known as AI accelerators, are crucial for training and running the latest generative AI technology. Nvidia currently stands as one of the few chipmakers producing these AI chips and dominates the market.

  • OpenAI is exploring the development of its own AI chips and has evaluated a potential acquisition target.

  • The company is seeking solutions to address the shortage of expensive AI chips it relies on.

  • OpenAI is considering building its own AI chip, collaborating with chipmaker Nvidia and diversifying its suppliers.

  • CEO Sam Altman has prioritised acquiring more AI chips for the company.


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