OpenAI Explores South Korea for Potential Partnerships in AI Industry

Amid intensifying competition in the field of artificial intelligence (AI), OpenAI’s CEO, Sam Altman, recently visited Seoul, South Korea to meet with key executives from Samsung Electronics and SK hynix, the world’s largest memory chip manufacturers. While seeking partnerships, Altman intends to challenge Nvidia, the undisputed leader in AI chip market, with the support of potential allies.

For Samsung and SK, joining forces with OpenAI presents an opportunity to enhance their game in the competitive race for next-generation chips, according to industry observers.

“OpenAI aims to take the lead in the era of artificial intelligence by combining its software with an extensive hardware network,” said Lee Jong-hwan, a professor of semiconductor engineering at Sangmyung University.

Altman’s visit followed reports that OpenAI plans to produce its own AI chips and gain greater control over supply chains, considering that nearly 90 percent of the supply currently comes from Nvidia.

The increasing demand for AI technology is driving the sales of graphics processing units (GPUs), which can accelerate AI computations through parallel processing. OpenAI spends a significant amount of money on securing advanced yet expensive Nvidia GPUs.

For instance, Nvidia’s flagship A100 chips cost $25,000 per unit. Due to limited supply, major tech companies need to secure their orders in advance. OpenAI itself has purchased over 10,000 units.

Altman has expressed concerns about chip shortages on multiple occasions. According to Bloomberg, he believes that the industry must act now to ensure sufficient supply by the end of the decade.

Having initiated similar discussions with Intel and Taiwanese TSMC, Altman engaged in talks with Samsung and SK for high-complexity chip production endeavors.

“The two Korean chip giants are ranked first and second in the global memory chip market. If they join the proposed AI alliance, Samsung and SK hynix will likely be responsible for the development and production of memory chips,” said an anonymous industry insider.

According to industry sources, one of the main focal points of these discussions was the focus on high-bandwidth memory (HBM) chips, which are highly advanced memory chips crucial for processing large amounts of data.

SK hynix became the first to deliver fourth-generation HBM, known as HBM3, to Nvidia in 2022, and expects to begin mass production of an extended version, HBM3E, in the first half of this year. Samsung is also ramping up its production. Currently, both Korean companies produce over 90 percent of the global supply.

For Samsung, a potential partnership with OpenAI would bolster its foundry business in its fight against TSMC.

TSMC currently dominates the global market for semiconductor manufacturing services, with a 57.9 percent sales share in the third quarter of 2023, while Samsung lags behind with a 12.4 percent share, as per TrendForce.

Although Samsung has developed advanced Gate-All-Around chip production technology, it still faces difficulties in securing orders from major customers like Apple, Nvidia, and Qualcomm.

“Korean chip manufacturers should explore new collaboration opportunities in the field of HBM or other AI chips. Samsung, in particular, has greater potential considering its capabilities in chip production and advanced packaging,” added Lee.

Altman’s 19-hour visit to Seoul was jam-packed with meetings and on-site visits. He arrived in Seoul on Thursday evening and embarked on a busy schedule on Friday, visiting Samsung’s Pyeongtaek campus, the world’s largest semiconductor manufacturing plant spanning an area equivalent to 500 football fields, where he met with the leaders of the company’s chip divisions. In the afternoon, he met with SK Group Chairman Chey Tae-won and SK hynix Acting CEO Kwak Noh-jung. Later in the day, he had a dinner meeting with Samsung Electronics Vice Chairman Kyung Kye-hyun, one of the co-chiefs overseeing the chip business.

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The source of the article is from the blog shakirabrasil.info