OpenAI partners with Foxconn to design hardware for AI data centres

By Debby Wu and Seth Fiegerman

 

OpenAI is partnering with Hon Hai Precision Industry Co. to design and manufacture hardware for data centres, the latest move by the ChatGPT-maker to meet its surging need for infrastructure to support artificial intelligence systems. 

 

Hon Hai, also known as Foxconn, will co-design and develop data centre server racks with OpenAI, and work to ensure such racks can be manufactured across the US. Foxconn also plans to produce cabling, power systems and other key equipment for data centre facilities in the country. The agreement with OpenAI does not include specific purchase commitments, the companies said.

 

OpenAI has in past months struck a series of multibillion-dollar deals with cloud computing providers and chipmakers from Nvidia Corp. to Advanced Micro Devices Inc., to dramatically increase its data centre footprint. At the same time, the US startup has taken steps to gain more control over the AI supply chain, including an agreement in October to buy chips and components from Broadcom Inc. The envisioned spending spree however has stoked concerns of an AI bubble.

 

For Foxconn, the latest pact underscores a longer-term intent to expand its role in the AI ecosystem, in part to reduce a reliance on assembling iPhones for Apple Inc. A direct tie-up with OpenAI suggests the Taiwanese company is keen on helping clients integrate their own designs into data centres. 

 

“This partnership is a step toward ensuring the core technologies of the AI era are built here,” OpenAI Chief Executive Officer Sam Altman said in a statement. “This work will strengthen US leadership and help ensure the benefits of AI are widely shared.”

 

OpenAI has spent much of this year working with Oracle Corp. and SoftBank Group Corp. on an ambitious initiative to invest $500 billion in US data centres and AI infrastructure over the next few years — a move announced in the early days after President Donald Trump returned to the White House. 

 

Foxconn, a partner in that Stargate project, is already expanding AI server production in the US, a key demand of the administration that also mitigates tariff risks. It’s unclear though how much value the OpenAI tie-up represents for Foxconn. Altman previously said his company has committed to invest $1.4 trillion on infrastructure for AI — a large sum for any business, let alone an unprofitable startup. 

 

On Friday, the Taiwanese company separately announced a venture with Intrinsic to explore AI data centres.