OpenAI Eyes In-House Chip Development

OpenAI, the brains behind the popular ChatGPT, is reportedly mulling over the possibility of crafting its very own AI chips. The information comes from individuals privy to the company’s recent internal dialogues.

The demand for AI chips has been increasing dramatically, and their availability is becoming a challenge.
Nvidia dominates the market with more than 80% share, making the AI chips both scarce and expensive.

What OpenAI is Considering:

Building in-house: Developing its own specialized AI chip.
Partnerships: Deepening collaboration with existing partners like Nvidia.
Diversification: Engaging with a broader set of chip manufacturers.
Acquisitions: The company has even considered buying a chip company, undergoing due diligence for a potential acquisition. However, the details about the potential target remain undisclosed.

Financial Implications: Running ChatGPT isn’t cheap:

A single query to ChatGPT is estimated to cost around 4 cents.
To operate at just 10% of Google search’s scale, the initial investment in GPUs would be about $48.1 billion, with an annual upkeep of approximately$ 16 billion in chips.

Challenges Ahead: Creating custom chips isn’t a straightforward task:

A colossal financial commitment, potentially running into hundreds of millions annually.
Previous endeavors by companies like Meta faced numerous challenges.
Even if OpenAI decides to tread this path, the journey to having a fully functional custom chip might span years.

OpenAI’s initiative isn’t unique. Tech giants such as Google and Amazon have already ventured into designing chips critical to their operations.
Interestingly, Microsoft, a significant supporter of OpenAI, is also in the game of developing a custom AI chip. Rumors suggest OpenAI is already testing it out.

OpenAI is actively exploring various strategies to address the AI chip scarcity, vital for its operations. Whether the company will decide to produce its own chips or choose a different path remains to be seen. For now, Nvidia continues to be a dominant player in the AI chip market.