OpenAI, the company known for ChatGPT, is considering making its own artificial intelligence chips. These plans could help tackle the shortage of these critical, expensive tools that OpenAI heavily relies on. The final decision is yet to be made, but the company is seriously considering its options.
OpenAI's AI Chip Considerations
According to insiders, OpenAI has been pondering over the idea of producing its own AI chips, an initiative that could potentially help address the scarcity of these costly resources which the company heavily depends on. The firm has gone as far as examining a prospective acquisition target, signaling that these considerations are more than just hypothetical musings. However, it is yet to make a final decision on whether to move forward with these plans.
Altman's Push for More Chips
OpenAI CEO Sam Altman has made no bones about the importance of AI chips for the company. He's been quite vocal about the pressing need for more graphics processing units (GPUs), essential components for running AI applications. The catch-22 here is that the market for these GPUs is virtually monopolized by Nvidia, which controls over 80% of the global supply. This puts OpenAI in an uncomfortable position as it tries to scale its operations.
Running ChatGPT, OpenAI's flagship product, is a costly affair. An analysis from Bernstein analyst Stacy Rasgon revealed that each query costs around 4 cents. If the scale of ChatGPT queries were to grow to even a tenth of Google's search volume, the company would need an initial investment of about $48.1 billion in GPUs. Moreover, it would need around $16 billion worth of chips every year just to keep the system operational. These figures highlight the scale of OpenAI's challenge in acquiring sufficient hardware.
If OpenAI decides to embark on the journey of developing its own AI chips, it would join the league of tech heavyweights like Google and Amazon. These firms have also recognized the strategic importance of chip design and have sought to take control of this key aspect of their business. However, such an undertaking would constitute a major strategic shift and require a hefty investment, possibly running into hundreds of millions of dollars annually.
Surge in Demand for Specialized AI Chips
The launch of ChatGPT last year has led to a surge in demand for specialized AI chips. This increased demand highlights the pivotal role of companies like Nvidia, which is one of the few chipmakers producing AI chips that can effectively power cutting-edge generative AI technology. The market dominance of Nvidia underscores the challenges faced by OpenAI and other AI firms in diversifying their hardware sources.