OpenAI Teams Up with Foxconn for AI Data Centre Hardware
OpenAI is collaborating with Hon Hai Precision Industry Co. to design and manufacture hardware for data centres, marking the latest initiative by the ChatGPT-maker to address its increasing demand for infrastructure to support artificial intelligence systems. Hon Hai, also referred to as Foxconn, will collaborate with OpenAI to co-design and develop data centre server racks, while also focusing on ensuring that these racks can be manufactured throughout the United States. Foxconn is set to manufacture cabling, power systems, and other essential equipment for data centre facilities within the country. The companies stated that the agreement with OpenAI does not encompass specific purchase commitments.
In recent months, OpenAI has secured a series of multibillion-dollar agreements with cloud computing providers and chipmakers, including Nvidia Corp. and Advanced Micro Devices Inc., to significantly expand its data centre presence. Simultaneously, the US startup has made moves to enhance its control over the AI supply chain, highlighted by an agreement in October to procure chips and components from Broadcom Inc. The anticipated spending spree, however, has ignited worries about the potential for an AI bubble.
For Foxconn, the latest pact highlights a strategic intention to broaden its involvement in the AI ecosystem, partly to lessen its dependence on assembling iPhones for Apple Inc. A direct collaboration with OpenAI indicates that the Taiwanese company is eager to assist clients in incorporating their own designs into data centres. “This partnership is a step toward ensuring the core technologies of the AI era are built here,” stated OpenAI Chief Executive Officer Sam Altman. “This work will strengthen US leadership and help ensure the benefits of AI are widely shared.”
OpenAI has dedicated a significant portion of this year to collaborating with Oracle Corp. and SoftBank Group Corp. on a bold initiative aimed at investing $500 billion in US data centres and AI infrastructure in the coming years — a plan revealed shortly after President Donald Trump resumed his position in the White House. Foxconn, a collaborator in the Stargate project, is currently increasing its AI server production in the US, addressing a crucial demand from the administration while also reducing tariff risks. The value of the OpenAI partnership for Foxconn remains uncertain. Altman previously stated, “his company has committed to invest $1.4 trillion on infrastructure for AI” — a substantial amount for any business, particularly for an unprofitable startup. On Friday, the Taiwanese company announced a venture with Intrinsic to explore AI data centres.
