Open AI ventures into AI chip development for ChatGPT and beyond : Report

OpenAI, the organisation responsible for creating ChatGPT, is considering venturing into the world of custom artificial intelligence (AI) chips. Facing a shortage of expensive AI chips, OpenAI is exploring various options to secure a stable supply. This article delves into OpenAI's potential move into chip development, the reasons behind it, and the challenges it may face.

Evaluating acquisition and custom chip development

OpenAI has not made a final decision but is actively exploring its options. One of these options includes evaluating potential acquisition targets in the chip manufacturing industry. The company is motivated to address the scarcity of AI chips, a challenge that impacts its operations significantly.

CEO's priorities

OpenAI's CEO, Sam Altman, has made acquiring more AI chips a top priority. He has expressed concerns over the shortage of advanced processors required to power OpenAI's software. Additionally, the high costs associated with running the necessary hardware pose significant challenges for the organisation.

High costs of running ChatGPT

Running ChatGPT is an expensive endeavour, with each query costing roughly 4 cents. To operate at a scale similar to Google search, OpenAI would need substantial investments, initially requiring billions of dollars worth of GPUs and ongoing expenses in the billions.

Entering the era of custom chips

If OpenAI decides to pursue custom chip development, it will join a select group of tech giants like Google and Amazon who design their own chips. However, this endeavour would be a major strategic initiative with substantial financial commitments.

Uncertain path ahead

While OpenAI has explored the possibility of an acquisition to expedite custom chip development, the specific target remains undisclosed. The process of developing custom chips is complex and may take several years, during which OpenAI may continue to rely on commercial chip providers.

Challenges and industry dynamics

Some tech companies have faced challenges in their custom chip efforts. Meta, for instance, encountered issues with its AI chips and is now working on a newer chip design. Microsoft, OpenAI's primary backer, is also developing a custom AI chip.

Rising demand for specialised AI chips

The launch of ChatGPT has led to a surge in demand for specialised AI chips, essential for training and running advanced AI models. Nvidia currently dominates the market as one of the few chipmakers producing these crucial components.

OpenAI's exploration of custom AI chips reflects the organisation's commitment to overcoming chip shortages and reducing operational costs. Whether through acquisition or independent chip development, OpenAI's journey into chip manufacturing will be closely watched in the tech industry.