According to reports, sources have revealed that OpenAI, the developer behind the wildly popular ChatGPT this year, is exploring the creation of its own artificial intelligence (AI) chip and has begun evaluating a potential acquisition target.
According to sources familiar with the matter, the company has been discussing various options to address the shortage of expensive AI chips that OpenAI relies on since at least last year. These options include manufacturing its own AI chips, working more closely with other chipmakers, including Nvidia, and diversifying its suppliers beyond Nvidia.
OpenAI CEO Sam Altman has reportedly made acquiring more AI chips a top priority for the company. He has publicly complained about the scarcity of graphics processing units (GPUs), a market dominated by Nvidia, which controls over 80% of the global market for chips best suited for running AI applications.
Altman points out that the effort to acquire more chips is related to two main issues: the shortage of advanced processors to power OpenAI's software, and the "dazzling" cost required to run the hardware needed to power its work and products.
Running ChatGPT would be extremely expensive for a company. Analysis by Bernstein analyst Stacy Rasgon shows that each query costs approximately 4 cents. If ChatGPT's search volume were to grow to one-tenth of Google's, it would require approximately $48.1 billion worth of GPUs and about $16 billion worth of chips annually to maintain its operation.
It remains unclear whether OpenAI will proceed with its custom chip plans. Industry insiders say that doing so would be a major strategic move and a massive investment, potentially costing hundreds of millions of dollars annually. Even so, success is not entirely guaranteed.
Analysts suggest that acquiring a chip company could accelerate OpenAI's development of its own chips. A source familiar with OpenAI's plans revealed that the company has already considered this path and conducted due diligence on potential acquisition targets. However, the specific company is currently unknown.
Finally, it's important to note that even if OpenAI continues its plans for custom chips (including acquisitions), this effort could take several years, during which time it will still need to rely on commercial suppliers such as Nvidia and AMD.
