ChatGPT's Silicon Ambition: OpenAI Reportedly Eyes AI Chip Domination Amid Nvidia's Reign

OpenAI, the parent organization of viral AI chatbot ChatGPT, has reportedly considered the development of its own AI chips and might be exploring potential acquisition options. 

What Happened: OpenAI has been actively exploring strategies to address the persistent shortage of AI chips. 

One option on the table is the development of its own custom AI chips, a move that would place OpenAI alongside tech giants like Alphabet Inc.’s GOOG GOOGL Google and Amazon Inc. AMZN, who have ventured into chip design to bolster their core businesses, reported Reuters citing people familiar with the company’s plans. 

See Also: After Italy Ban, OpenAI’s ChatGPT Now Faces Legal Storm In Poland Over Privacy Concerns

OpenAI’s CEO, Sam Altman, has been vocal about the challenges posed by the scarcity of graphics processing units or GPUs, which are essential for running AI applications. 

Currently, Nvidia Corp. NVDA dominates the GPU market with over 80% of global market share. OpenAI’s reliance on Nvidia GPUs, particularly in its Microsoft Corporation MSFT-backed supercomputer, has led to substantial operating costs.

Running ChatGPT, for instance, costs about 4 cents per query, making it a costly endeavor. Analysts estimate that at a tenth of Google search’s scale, ChatGPT would require an initial investment of $48.1 billion in GPUs and an annual expenditure of $16 billion on chips, the report noted. 

To alleviate this burden, OpenAI could opt for the acquisition strategy, similar to Amazon’s acquisition of Annapurna Labs in 2015. However, the identity of the potential acquisition target remains undisclosed. 

It is not clear, however, if OpenAI would build its own AI chips or fast track the process by acquiring another company.

Having said that, OpenAI’s pursuit of its custom AI chips is a complex endeavor that may take several years, maintaining its dependence on commercial providers like Nvidia in the interim, the report highlighted. 

Why It’s Important: Earlier this week, it was reported that the EU has been looking closely at the market of AI chips. The union is especially interested in big companies like Nvidia, because of its dominance in the market.

The EU intends to find out if there are potentially abusive practice happening. Meanwhile, in the U.S., the Defense Department has also started putting pressure on AI companies to be more transparent about their technology. On the other hand, France has been probing Nvidia’s significant role in the AI chip market. 

Photo Courtesy: Shutterstock.com

Check out more of Benzinga’s Consumer Tech coverage by following this link.

Read Next: Bing AI Image Creator Crosses The Line – Unsettling 9/11-esque Images Spark Outrage