According to persons familiar with the business’s plans, OpenAI, the startup behind ChatGPT, is entertaining developing its own artificial intelligence AI chips and has gone as far as analyzing a prospective acquisition target.

According to recent internal negotiations disclosed to Reuters, the corporation has not yet decided whether to proceed. According to those familiar with the situation, it has been discussing various solutions to the lack of pricey AI chips on which OpenAI relies since at least last year.

These choices include developing its own AI processor, collaborating more closely with other chipmakers such as Nvidia, and diversifying its sources outside Nvidia.OpenAI did not respond to comment inquiries.

The owner of ChatGPT CEO Sam Altman has made the purchase of additional AI chips a primary priority for the company. He has openly expressed his dissatisfaction with the paucity of graphics processing units, a sector dominated by Nvidia, which controls more than 80% of the global market for the chips best suited to running AI applications.

Altman attributes the endeavor to two key concerns: a shortage of the powerful processors that power OpenAI’s software and the “eye-watering” price associated with running the hardware required to power its activities and goods.

Since 2020, OpenAI has been developing generative artificial intelligence technologies on a gigantic supercomputer built by Microsoft, one of its main investors, that employs 10,000 Nvidia graphics processing units (GPUs).

The cost of running ChatGPT is extremely high for the organization. According to Bernstein analyst Stacy Rasgon’s research, each query costs about 4 cents. If ChatGPT queries grew to a tenth the size of Google search, it would require approximately $48.1 billion in GPUs initially and approximately $16 billion in chips per year to remain functioning.


In this February 21, 2023 illustration, a keyboard is placed in front of a displayed OpenAI logo. Acquire Licencing Rights for REUTERS/Dado Ruvic/Illustration/File Photo

An effort to develop its own AI chips would place OpenAI in the company of a tiny group of huge tech organizations, like Alphabet’s Google and, that have sought control over the design of the chips that are critical to their operations.

It is unclear whether OpenAI will proceed with its goal to develop a bespoke chip. According to industry professionals, doing so would be a big strategic undertaking and a significant investment that may cost hundreds of millions of dollars per year. Even if OpenAI devoted resources to the endeavor, it would not be successful.

An acquisition of a chip business, similar to’s acquisition of Annapurna Labs in 2015, could accelerate the process of developing OpenAI’s own processor.

The Hidden Agenda: OpenAI’s Quest for Tech Dominance

According to one person familiar with the company’s objectives, OpenAI had studied the road to the point where it undertook due diligence on a prospective acquisition target.The identity of the firm OpenAI investigated purchasing could not be discovered.

Even if OpenAI proceeds with its ambitions for a custom processor, which may include an acquisition, the project is likely to take many years, leaving the business reliant on commercial vendors such as Nvidia and Advanced Micro Devices in the meantime.

For years, some large technology corporations have been developing their own CPUs, with mixed results. According to Reuters, Meta’s bespoke chip endeavor has been plagued by problems, prompting the company to abandon several of its AI processors. The Facebook owner is now developing a newer processor that will be capable of performing all forms of AI operations.

According to The Information, OpenAI’s main funder, Microsoft, is also constructing a unique AI chip that OpenAI is testing. The plans could indicate a deeper schism between the two organizations.

Since the release of ChatGPT last year, there has been a surge in demand for specialized AI chips. To train and run the most recent generative AI technology, certain chips, or AI accelerators, are required. Nvidia, which dominates the industry, is one of the few chipmakers that makes useful AI chips.

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