Sam Altman is seeking trillions of dollars in funding to challenge NVIDIA’s dominance in the AI chip sector.
OpenAI CEO Sam Altman plans to fight NVIDIA’s dominance in the AI chips sector. According to a Wall Street Journal report, the tech billionaire seeks funding of up to $7 trillion to revolutionize the current semiconductor market.
In 2023, NVIDIA became the world’s largest semiconductor manufacturer, reaching a market capitalization of $1.7 trillion. It was one of the fastest-growing stocks, almost beating giants like Amazon and Alphabet in terms of market cap.
The company outclassed competitors by being the first to build AI chips. At the moment, NVIDIA controls 80% of the AI chips market.
NVIDIA is also a protagonist in the current “nearshoring” of the US semiconductor industry. So far, it has outsourced chip production to TSMC, a Taiwan-based giant. With the increasing restrictions on chip outsourcing by the Biden administration, NVIDIA has been the target of many government interventions to avoid exports to East Asia, particularly China.
The H100 and A100 chips are all-purpose AI processors for regular consumers. They were built to go around said government restrictions, and are currently the fastest AI chips on the market. They power OpenAI’s flagship software ChatGPT, as well as several Silicon Valley companies like Meta, Amazon, and Google.
Sam Altman’s plan
To challenge NVIDIA’s dominant position, Sam Altman seeks investments for a new AI chip startup. According to one WSJ source, Altman needs to raise between $5 and $7 trillion for this endeavor.
“The world needs more AI infrastructure—fab capacity, energy, datacenters, etc—than people are currently planning to build,” Altman wrote in a recent article on X (formerly known as Twitter).
Last year, the tech pioneer traveled across the Middle East to look for investors. He was apparently working on a project codenamed “Tigris” before he was fired as CEO, only to be reinstated days later.
Tigris would be OpenAI’s answer to NVIDIA’s de facto dominance in the sector.
Already in 2018, Altman tried launching an AI chip company, founding a startup called Rain Neuromorphics. One year later, OpenAI expressed its intention to invest $51 million in the new startup, far less than what Altman is seeking now.
NVIDIA, however, is not sitting idle. According to a Reuters exclusive report, the company is launching a new business chip with high personalization and B2B capabilities.
The intention of integrating customers’ proprietary technology into custom chips goes back to 2022, but the technology is still developing as of Reuters reporting. Right now, NVIDIA is less preoccupied with Altman’s trillion-dollar plan and more with direct competitors like Qualcomm and Marvell Technologies. With this development, NVIDIA intends to leave both in the dust.
