OpenAI aims to produce its own AI chips

OpenAI has been discussing various options since last year to address the shortage of expensive AI chips. These options include developing OpenAI’s own AI chips, working more closely with other chipmakers including Nvidia, and diversifying suppliers beyond Nvidia, according to Reuters.

OpenAI may produce artificial intelligence chips to serve as the optimal hardware platform for its AI models.

OpenAI CEO Sam Altman has made acquiring more AI chips a top priority for the company. He recently complained publicly about the shortage of graphics processing chips, a market dominated by Nvidia. The push to acquire more chips is tied to two major concerns Altman has identified: a shortage of advanced processors for OpenAI’s software and the high costs of running the hardware needed to power the company’s AI models.

The push to develop AI chips would put OpenAI in the company of big tech companies like Alphabet's Google and Amazon that are looking to gain control over the design and manufacturing of chips for businesses.

It’s unclear whether OpenAI will move forward with its plans to develop custom chips. Industry veterans say it would be a strategic initiative that could involve hundreds of millions of dollars in investment each year. But there’s no guarantee that OpenAI will succeed in its efforts to build its own chips. Acquiring a chip company could accelerate OpenAI’s efforts to develop its own chips, as Amazon did when it bought Annapurna Labs in 2015.

Even if OpenAI moves forward with its plans for custom chips, including acquisitions, the effort will likely take several years, leaving the company dependent on suppliers like Nvidia and Advanced Micro Devices (AMD) in the meantime.

Several major tech companies have been building their own processors for years, with limited success. Meta’s efforts to produce custom chips have run into problems, forcing the company to scrap some of its AI chips, according to Reuters. Facebook’s owner is now working on a new chip that can support all AI models. Microsoft, a major investor in OpenAI, is also developing a custom AI chip that OpenAI is testing, according to The Information.

Demand for dedicated AI chips has skyrocketed since ChatGPT launched last year. Smart chips are essential for training and running the latest generation of AI technology. Nvidia is one of the few chip companies that has successfully produced AI chips and is dominating the market. The company controls more than 80% of the global market for chips that run AI applications.

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