Late last year, OpenAI CEO Sam Altman began promoting a bold plan to create the computing power the company needs to develop more powerful artificial intelligence.

In talks with investors in the United Arab Emirates, chipmakers in Asia and officials in Washington, he proposed that they join forces to launch a multitrillion-dollar global effort to build new chip factories and data centers around the world, including in the Middle East.

While some participants and regulators have questioned parts of the plan, the talks have continued and expanded to Europe and Canada.

According to nine people familiar with the discussions with OpenAI, OpenAI's global technology future blueprint would build countless data centers, providing a global computing resource pool dedicated to building the next generation of AI technology.

As bizarre as the plan sounds, Altman's actions show that in just a few years he has become one of the world's most influential technology executives, able to hold talks with Middle Eastern capital, Asian manufacturing giants and top American regulators in a matter of weeks.

It also shows the tech industry's determination to accelerate the development of AI technology, which is seen as potentially as transformative as the Industrial Revolution.

01 Rumors about OpenAI

When word got out that Altman, 39, was seeking trillions of dollars in investment, some derided him as trying to secure funding equivalent to a quarter of the U.S.’s annual economic output. Officials in Washington have also expressed concerns about an American company trying to build critical technology facilities in the Middle East. To build AI infrastructure in multiple countries, American companies need approval from U.S. officials who oversee export controls.

According to the nine people familiar with the matter, Altman has scaled back his ambitions to hundreds of billions of dollars and has developed a new strategy: to attract support from U.S. government officials by helping build data centers in the United States first.

It’s unclear how this will work. OpenAI has been trying to put together a loose coalition of companies, including data center construction companies such as Microsoft as well as investors and chipmakers. But it remains unclear who will pay, who will profit and what exactly will be built. Meanwhile, OpenAI is in separate talks to raise $6.5 billion to support its own operations, a deal that could value the startup at $150 billion. MGX, a technology investment firm in the United Arab Emirates, is one of the potential investors, along with Microsoft, Nvidia, Apple and Tiger Global, according to three people familiar with the matter.

OpenAI is seeking cash because its costs far outstrip revenue, according to the three people familiar with the matter. OpenAI brings in more than $3 billion in sales each year, but spends about $7 billion.

Bloomberg, The Wall Street Journal and Reuters have previously reported on some of OpenAI's plans. Conversations with the nine people familiar with the matter provide a more complete picture of the efforts and how its strategy is evolving.

In private conversations, Altman has compared the world's data centers to electricity, according to three people familiar with the matter. As electricity becomes more ubiquitous, people find better ways to use it. Altman hopes to do the same thing with data centers, eventually making AI technology as commoditized as electricity.

02 OpenAI's ChatGPT

Chatbots like OpenAI’s ChatGPT learn skills by analyzing reams of digital data. But the chips and data centers that power that process are in short supply. If supply increased, OpenAI believes it could build more powerful AI systems.

In dozens of meetings, OpenAI executives urged tech companies and investors to expand computing power around the world, according to nine people familiar with the company’s discussions.

“Sam is thinking about how to keep OpenAI relevant,” said Daniel Newman, CEO of tech research firm Futurum Group. “It needs more computing power, more connectivity, more electricity.”

Altman’s original plan called for the UAE to fund the construction of multiple chip manufacturing plants, each of which could cost as much as $43 billion. The plan would reduce chip manufacturing costs for companies like TSMC, the world’s largest chip producer. TSMC makes semiconductors for Nvidia, a leading AI chip developer. The plan would allow Nvidia to produce more chips, which OpenAI and other companies would use in more AI data centers.

Altman and his colleagues discussed the possibility of building data centers in the UAE, which has ample electricity. In the U.S., companies have trouble building new data centers because there isn’t enough electricity to run them.

OpenAI has discussed funding infrastructure plans with MGX, an AI investment vehicle created by the UAE. OpenAI has also held talks with TSMC, Nvidia and another chip company, Samsung.

Omar Sultan Al Olama, the UAE’s minister of state for artificial intelligence, told The New York Times in March that such a mega deal makes business sense.

Nvidia declined to comment. MGX and Samsung did not respond to requests for comment.

OpenAI said in a statement that it is focused on building infrastructure in the U.S. “with the goal of ensuring that the United States remains a global leader in innovation, driving reindustrialization across the country, and ensuring that the benefits of AI are widely accessible.”

TSMC spokesman Will Moss said the company is open to discussing the possibility of expanding semiconductor development but is currently focused on global expansion projects and has “no new investment plans to disclose at this time.”

Altman visited TSMC’s headquarters in Taiwan shortly after launching the fundraising effort and told TSMC executives that his vision would require $7 trillion and many years to build 36 semiconductor factories and additional data centers. It was his first visit to one of the multibillion-dollar plants, according to two people familiar with the matter.

TSMC executives thought the idea was so absurd that they began calling Altman "podcast bro," one of the people said. Adding a few chipmaking plants, let alone 36, is extremely risky because the money required is so huge.

"We have never and will never consider trillion-dollar projects. While the full construction of global AI infrastructure may take decades and the total investment may be trillions of dollars, the specific projects OpenAI is exploring are hundreds of billions of dollars," said Liz Bourgeois, an OpenAI spokeswoman.

Around the same time, Altman visited South Korea and held talks with the country's two chipmakers, Samsung and SK Hynix. But he soon encountered national security concerns about the UAE's role in developing a technology that many believe is critical to the economy and military.

Some White House officials and congressional leaders are concerned that approving infrastructure in the UAE could give China a backdoor into important technology.

Talks with the U.S. Commerce Department, the UAE and chipmakers are continuing. OpenAI has also expanded discussions in other regions, according to four people familiar with the matter.

Company executives met with Japanese officials in Tokyo in the spring. They proposed a plan to build data centers using power from nuclear power plants that were shut down after the 2011 Fukushima disaster.

In one meeting, a Japanese official laughed when OpenAI said it needed 5 gigawatts of power, a thousand times more than the average data center consumes, according to a person familiar with the matter.

Later, in meetings with German officials, OpenAI explored building data centers in the North Sea to tap into 7 gigawatts of power from offshore wind turbines.

But political pressure forced OpenAI to explore options in the United States. At a meeting with other tech leaders at the White House this month, Altman presented an OpenAI research report called "Infrastructure is Destiny."

The report called for new data centers in the United States to cost $100 billion each — about 20 times the cost of the most powerful data centers today, according to two people familiar with the matter. The data centers would house 2 million AI chips and consume 5 gigawatts of power. Altman spoke while sitting in front of a portrait of President Franklin D. Roosevelt, who had invested in large infrastructure projects such as New York’s Lincoln Tunnel, according to two people familiar with the matter.

The OpenAI CEO told White House officials, including Commerce Secretary Gina Raimondo and National Security Advisor Jake Sullivan, that AI data centers would be a catalyst for reindustrializing the United States, creating up to 500,000 jobs.

Altman also warned that the United States risks falling behind China and that if the United States does not work with the UAE, then China will take over.

This week, President Biden and UAE President Sheikh Mohammed bin Zayed met at the White House and directed senior officials from both countries to develop a memorandum detailing future cooperation on artificial intelligence.

To bolster its efforts, OpenAI hired Chris Lehane, a Clinton White House lawyer, as vice president of global policy and hired two Commerce Department staffers who worked on the CHIPS Act, a bipartisan law aimed at increasing domestic chip manufacturing. One of them will be responsible for managing future infrastructure projects and policies.

Last week, Altman spoke modestly about the company's ambitions at an investor event for OpenAI client T-Mobile.

"We're building on a lot of existing work," he said. "If you think about everything that's happened in human history to discover semiconductors, to make chips, to make networks, to make these big data centers, we're just building on a little bit of that."

Reference link: https://www.nytimes.com/2024/09/25/business/openai-plan-electricity.html

View more at EASELINK