OpenAI's AI Chip Ambitions
OpenAI, a leading AI startup, is considering developing its own AI chips amidst increasing demand and chip shortages. Company discussions on chip strategies started last year, with options including buying an AI chipmaker or designing chips in-house, as reported by Reuters.
OpenAI, similar to many competitors, currently uses GPU-based hardware for models such as ChatGPT, GPT-4, and DALL-E 3. These GPUs, ideal for training advanced AIs due to their parallel computation capabilities, are in short supply. Notably, the rise in generative AI usage has put pressure on the GPU supply chain, with Nvidia’s top AI chips being unavailable till 2024.
OpenAI uses multiple GPUs in cloud clusters to run its models, which results in high costs. A Bernstein analysis indicated that scaling ChatGPT queries to one-tenth of Google Search would demand an initial GPU investment of around $48.1 billion and $16 billion annually for maintenance.
Creating AI chips isn't new. Google uses TPUs for AI systems like PaLM-2 and Imagen, while Amazon provides its AWS customers with proprietary chips for training and inferencing. Microsoft is reportedly partnering with AMD on an AI chip named Athena, which OpenAI is testing.
With over $11 billion raised in venture capital and nearing $1 billion in annual revenues, OpenAI can potentially heavily invest in research. There's also talk of a share sale, possibly increasing its valuation to $90 billion, as per a Wall Street Journal article.
However, the AI chip sector is challenging. AI chipmaker Graphcore saw its valuation drop by $1 billion after a Microsoft deal went awry and planned to cut jobs following declining revenues and rising losses. Similarly, Intel's AI chip subsidiary, Habana Labs, laid off roughly 10% of its staff, and Meta faced difficulties with its AI chip development.
If OpenAI decides to venture into AI chip manufacturing, it could be a prolonged, costly endeavor. The feasibility of this venture, given the associated risks, and whether stakeholders, including Microsoft, support this move, remains uncertain.
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