OpenAI considers making its own AI chips: Reuters

OpenAI, the creator of ChatGPT, is looking into making its own chips for artificial intelligence and has even considered buying a chip company, sources familiar with the company’s plans told Reuters.

The company has not made a final decision, Reuters said. But it has explored various ways to deal with the shortage of expensive AI chips that OpenAI depends on, since at least last year.

These ways have included designing its own AI chip, collaborating more closely with other chipmakers like Nvidia and also using more than one supplier besides Nvidia

Getting more AI chips is a top priority for CEO Sam Altman. He has publicly complained about the lack of graphics processing units, a market that Nvidia dominates with more than 80% of the global share for the chips that are best for running AI applications.

Altman is worried about two things: not having enough of the advanced processors that power OpenAI’s software and the high costs of running the hardware needed for its efforts and products.

Since 2020, OpenAI has used a huge supercomputer built by Microsoft, one of its biggest backers, that uses 10,000 of Nvidia’s graphics processing units (GPUs) to develop its generative artificial intelligence technologies.

ChatGPT is very costly for the company. Each query costs about 4 cents, according to an analysis from Bernstein analyst Stacy Rasgon. If ChatGPT queries grow to a tenth of Google search, it would need about $48.1 billion worth of GPUs at first and about $16 billion worth of chips a year to keep running.

If OpenAI decides to build its own AI chip, it would join a small group of big tech players such as Google and Amazon.com that have tried to take control over making the chips that are essential to their businesses. But building its own AI chip would be a big and risky investment that could cost hundreds of millions of dollars a year, industry veterans say.

And it would not guarantee success. Buying a chip company could help OpenAI make its own chip faster – as it did for Amazon.com when it bought Annapurna Labs in 2015. OpenAI had looked into buying a chip company so closely that it checked out a potential target, one of the sources said. The name of the company OpenAI looked at buying could not be found out.

Even if OpenAI goes ahead with plans for its own chip – including buying a company – it would take several years. So the company would still have to rely on commercial providers like Nvidia and Advanced Micro Devices for now. Some big tech companies have been making their own processors for years with limited results.

Meta’s custom chip effort has had problems, leading the company to cancel some of its AI chips, Reuters reported. The Facebook owner is now working on a new chip that will do all kinds of AI work. OpenAI’s main backer, Microsoft, is also making a custom AI chip that OpenAI is testing, The Information reported.

The plans could mean further separation between the two companies. Demand for special AI chips has gone up since ChatGPT launched last year. Specific chips, or AI accelerators, are needed to train and run the latest generative AI technology. Nvidia is one of the few chipmakers that makes useful AI chips and rules the market.