**OpenAI’s Latest Moves Stir Silicon Valley’s Chip Wars**
Just when you thought the chip wars in Silicon Valley were simmering down, OpenAI has thrown a curveball, turning the tech landscape into a real-life soap opera. In a dramatic twist, OpenAI announced a multi-billion-dollar deal with AMD, leaving Nvidia’s CEO, Jensen Huang, seemingly caught off guard.
Huang, during a live CNBC interview, was asked about the AMD arrangement. His response, a less-than-convincing “Not really,” raised eyebrows, especially given Nvidia’s recent $100 billion investment in OpenAI. The AMD partnership, while lucrative, is also complex, with OpenAI set to receive significant AMD stock, potentially up to 10% of the company over time, in exchange for using and aiding in the development of AMD’s next-gen AI chips. In essence, OpenAI becomes an AMD shareholder, mirroring Nvidia’s stake in OpenAI.
Huang revealed that Nvidia will now sell hardware directly to OpenAI, a departure from previous cloud-based partnerships like Microsoft and Oracle. The goal? To help OpenAI self-host its massive AI data centers. However, Huang admitted that OpenAI currently lacks the funds to purchase all the required hardware. Each gigawatt of AI infrastructure can cost up to $60 billion, and OpenAI has already committed to 10 gigawatts through its “Stargate” project with Oracle and SoftBank, not to mention the $300 billion cloud deal with Oracle and the 6 gigawatts promised to AMD. With Nvidia and potential European expansions, OpenAI’s total commitments this year could reach a staggering $1 trillion.
Meanwhile, OpenAI’s CEO, Sam Altman, hinted at more deals on the horizon. In an interview with a16z’s podcast, he stated, “You should expect much more from us in the coming months.” With OpenAI’s shopping spree showing no signs of slowing down, the tech industry might want to brace itself for more surprises.
The world’s most prominent AI startup is on a spending spree, and the tech industry’s wallets are feeling the heat. As OpenAI continues to make waves, one thing is clear: the chip wars in Silicon Valley are far from over.
