FILE PHOTO: A keyboard is placed in front of a displayed OpenAI logo in this illustration taken February 21, 2023.
REUTERS/Dado Ruvic/Illustration/File Photo
SAN FRANCISCO/WASHINGTON — OpenAI, the company behind ChatGPT, is exploring the development of its own artificial intelligence chips and has even considered acquiring another company for this purpose, according to sources familiar with OpenAI’s plans. However, no final decision has been made yet, as internal discussions continue. OpenAI has been discussing various options to address the limited supply of expensive AI chips it relies on. These options have included building its own AI chip, collaborating more closely with chipmakers like Nvidia, and expanding its pool of suppliers beyond Nvidia. OpenAI declined to comment on the matter.
CEO Sam Altman has prioritized the acquisition of additional AI chips for OpenAI. He has publicly expressed concerns about the scarcity of graphics processing units (GPUs), which are crucial 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 exorbitant costs associated with running the necessary hardware for OpenAI’s operations and products are the main driving factors behind the company’s efforts to acquire more chips. According to Bernstein analyst Stacy Rasgon, each query on ChatGPT costs approximately 4 cents. If ChatGPT’s queries were to reach a scale equal to one-tenth of Google search, it would require an initial investment of around $48.1 billion in GPUs and about $16 billion worth of chips per year to sustain operations.
Custom Chips Era
Developing its own AI chips would place OpenAI in a league with other major tech players, such as Google and Amazon, who have sought to design chips tailored to their businesses. However, it is uncertain whether OpenAI will proceed with building a custom chip. This ambitious undertaking would require significant resources and could cost hundreds of millions of dollars annually, according to industry experts. Furthermore, success is not guaranteed even with substantial investment. An alternative route would involve acquiring a chip company, which could accelerate OpenAI’s chip development process, similar to how Amazon acquired Annapurna Labs in 2015. Unfortunately, the exact identity of the acquisition target examined by OpenAI remains unknown. In the meantime, even if OpenAI does move forward with plans for a custom chip, it will likely depend on commercial providers like Nvidia and Advanced Micro Devices for several years.
Some big tech companies that have ventured into developing their own processors have faced challenges. Meta, for example, encountered issues with its custom chip project and had to discard some of its AI chips, as reported by Reuters. The company is now working on a newer chip that can handle a wider range of AI tasks. On a similar note, Microsoft, OpenAI’s main backer, is reportedly working on its own custom AI chip, which OpenAI is currently testing. These plans could potentially lead to a greater divergence between Microsoft and OpenAI.
The demand for specialized AI chips has surged since the launch of ChatGPT. These specific chips, known as AI accelerators, are essential for training and running the latest generative AI technology. Nvidia is one of the few chipmakers that produces these valuable AI chips and currently dominates the market.
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