OpenAI's New Friend? Abu Dhabi's Investment Firm MGX Eyes Chip Collaboration: Report

A newly established investment firm in Abu Dhabi is reportedly in discussions to back OpenAI‘s chip ambitions.

What Happened: A new Abu Dhabi investment firm, MGX, is reportedly negotiating to invest in OpenAI’s ambitious semiconductor project, the Financial Times reported on Thursday based on unnamed sources. This move aligns with the strategy of the United Arab Emirates (UAE) to become a global key player in artificial intelligence (AI) development.

MGX, which is state-funded and just launched, is chaired by Sheikh Tahnoon bin Zayed al-Nahyan, the UAE’s national security adviser. The discussions are still at an early stage, but OpenAI’s CEO, Sam Altman, is looking to establish a semiconductor business to lessen reliance on Nvidia’s advanced chips.

The potential investment by MGX comes as traditional technology venture capitalists may be priced out of the burgeoning AI infrastructure, which could cost anywhere from hundreds of billions to $7 trillion over the next few years.

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Sheikh Tahnoon oversees a vast $1.5 trillion empire, including sovereign wealth funds and private enterprises. He also chairs G42, an AI-focused group backed by Mubadala, which has partnerships with OpenAI, Microsoft, and Cerebras. With the establishment of MGX, Sheikh Tahnoon aims to position Abu Dhabi as a central hub in the global AI strategy.

However, the UAE’s AI ambitions have required the careful navigation of trade tensions between the U.S. and China. After Sheikh Tahnoon visited Washington in June, the UAE prioritized U.S/ tech partnerships, leading G42 to sever ties with Chinese partners and divest from China, a move that U.S. officials praised.

Why It Matters: The potential investment in OpenAI’s semiconductor project by Abu Dhabi’s MGX reflects the growing importance of AI technology and the need for specialized hardware to advance its capabilities. OpenAI has been seeking funding from nation-states. Reportedly, OpenAI is also in talks with Singapore’s Temasek for the same.

Moreover, the UAE’s interest in OpenAI coincides with Elon Musk‘s public dispute with the company. Recently, Musk accused OpenAI of unethical data sourcing practices for its AI model, Sora, highlighting the complexities and controversies surrounding AI development. As OpenAI continues to push the boundaries of AI technology, backing powerful entities like MGX could prove crucial in navigating these challenges and securing a competitive edge in the global AI race.

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