OpenAI is tapping Taiwan Semiconductor Manufacturing Co (TSM) to produce its first-generation in-house artificial intelligence chips, with the company said to be on track to finalize the design this year.
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The ChatGPT company is in the process of finalizing the design for the chips, which will be sent to TSM ready for full production in 2026, reports Reuters in an exclusive.
OpenAI Joins Hands with Broadcom and TSM
OpenAI’s decision to work on its own AI chips was first reported in October 2023, with the move seen as an important step to securing a steady supply of chips and ultimately reducing costs. Subsequently, it was reported in October 2024 that the San Francisco company was working with Broadcom (AVGO) and TSM to build in-house chips designed to support AI systems.
The move is seen as an important step for OpenAI to reduce its reliance on Nvidia (NVDA) chips while demand for its AI services skyrockets at the same time as tech companies build out increasingly large AI infrastructure of their own.
Demand for NVDA chips has been such that Oracle (ORCL) boss Larry Ellison and Tesla (TSLA) CEO Elon Musk literally “begged” Nvidia’s Jensen Huang for more GPUs over a dinner last year.
“I would describe the dinner as Oracle—me and Elon begging Jensen for GPUs,” Ellison said. “Please take our money. Please take our money. By the way, I got dinner. No, no, take more of it. We need you to take more of our money please.”
According to Reuters, the work on OpenAI’s in-house chip is being led by Richard Ho, who joined the company more than a year ago from Alphabet, where he had worked on custom AI chip project.
The move by OpenAI may help secure its position in the AI sector at a time of increasing competition from big technology companies which are investing billions of dollars in developing their own AI systems.
However, it’s not a guarantee as companies like Microsoft (MSFT) and Meta Platforms (META) have struggled to develop chips of their own.
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