OpenAI, Foxconn to partner in AI hardware design , manufacturing in the US

OpenAI and Taiwan electronics giant Foxconn have agreed to a partnership to design and manufacture key equipment for artificial intelligence data centres in the United States as part of ambitious plans to fortify American AI infrastructure.

Foxconn, which makes AI servers for Nvidia and assembles Apple products including the iPhone, will be co-designing and developing AI data centre racks with OpenAI under the agreement, the companies said in separate statements on Thursday and Friday.

The products Foxconn will manufacture in its US facilities include cabling, networking and power systems for AI data centres, the companies said. OpenAI will have “early access” to evaluate and potentially to purchase them.

Foxconn has factories in the US, including in Ohio and Texas. The initial agreement does not include financial obligations or purchase commitments, the statements said.

Moving to diversify

The Taiwan contract manufacturer has been moving to diversify its business, developing electric vehicles and acquiring other electronics companies to build out its product offerings.

“This partnership is a step toward ensuring the core technologies of the AI era are built here,” Sam Altman, CEO of San Francisco-based OpenAI, said in the statement. “We believe this work will strengthen US leadership and help ensure the benefits of AI are widely shared.”

OpenAI has committed US$1.4 trillion to building AI infrastructure. It recently entered into multibillion partnerships with Nvidia and AMD to expand the extensive computing power needed to support its AI models and services. It is also partnering with US chipmaker Broadcom in designing and making its own AI chips.

But its massive spending plans have worried investors, raising questions over its ability to recoup its investments and remain profitable. Altman said this month that OpenAI, a startup founded in 2015 and maker of ChatGPT, is expected to reach more than US$20 billion in annualised revenue this year, growing to “hundreds of billions by 2030.”

Foxconn’s Taiwan-listed share price has risen 25 per cent so far this year, along with the surge in prices for many tech companies benefiting from the craze for AI.

The Taiwan company’s net profit in the July–September quarter rose 17 per cent from a year earlier to just over 57.6 billion new Taiwan dollars about US$1.8 billion, with revenue from its cloud and networking business, including AI servers, contributing the most business.

“We believe the importance of the AI industry is increasing significantly,” Liu said during Foxconn’s earnings call this month.

“I am very optimistic about the development of AI next year and expect our cooperation with major clients and partners to become even closer,” said Liu.

– AP