Breaking: ChatGPT Maker OpenAI Plans To Build Its Own AI Chips

According to a recent Reuters report, ChatGPT’s parent company OpenAI is exploring the possibility of developing its own artificial intelligence chips. In addition, it is also looking to acquire a chip company to address the ongoing shortage of expensive AI chips. This move, driven by CEO Sam Altman’s prioritization of securing more AI chips, reflects the growing popularity as well as demand in the AI chip industry.

OpenAI Exploring Custom AI Chips

OpenAI, the organization behind ChatGPT, is actively exploring the development of its artificial intelligence (AI) chips. This move comes as a potential solution to the shortage of the chips, Reuters reported while citing people familiar with the matter.

Although the company has not yet made a final decision, discussions about addressing the scarcity of AI chips have been ongoing, and they involve various potential approaches. OpenAI’s CEO, Sam Altman, has reportedly highlighted the urgent need for additional AI chips as a top priority for the company.

Notably, the scarcity of graphics processing units (GPUs), especially those from Nvidia, has posed significant challenges. Nvidia currently controls more than 80% of the global market for GPUs essential for AI applications.

Meanwhile, Altman has expressed concerns about both the shortage of advanced processors necessary for OpenAI’s software and the substantial costs associated with operating the required hardware infrastructure.

Notably, several analysts believe that running ChatGPT is a costly endeavor for OpenAI. If ChatGPT’s query volume were to reach one-tenth of Google search, it would necessitate an initial investment of about $50 billion in GPUs and around $15 billion in chips annually to sustain its operations, the report showed.

Meanwhile, OpenAI proceeded with its plan to develop custom AI chips. Several experts believe that it would place the organization among a select group of tech giants like Google and Amazon, that have taken steps to design their own chips tailored to their specific needs.

However, it’s important to note that committing to such a venture would be a substantial undertaking, with costs potentially reaching hundreds of millions of dollars annually. The success of such an endeavor is not guaranteed, even with significant resources dedicated to it.

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What’s Next For ChatGPT Maker?

OpenAI, in its quest for additional AI chips, has also explored the option of acquiring a chip company. This strategic move could potentially expedite the development of OpenAI’s custom chip, much like Amazon’s acquisition of Annapurna Labs in 2015 aided the e-commerce giant in creating its chips.

While OpenAI has indeed considered this path and performed due diligence on a potential acquisition target, details about the company in question remain undisclosed.

Meanwhile, whether the company decides to build its custom AI chips or pursues an acquisition, the effort is likely to span several years. During this transitional period, the organization will continue to rely on commercial providers like Nvidia and Advanced Micro Devices to meet its AI chip needs.

However, demand for specialized AI chips has surged since ChatGPT’s launch, emphasizing the critical nature of addressing chip shortages in the AI industry. Notably, in a related development, Microsoft, one of OpenAI’s primary backers, is also working on its custom AI chip, which OpenAI is currently testing. This could signify further independence between the two companies.

While some tech giants have embarked on their custom processor journeys, the challenges have been substantial. Meta, for instance, has faced difficulties with its custom chips and is now working on a newer chip designed for various AI tasks.

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