Reuters & Bloomberg: OpenAI to design “inference AI” chip with Broadcom and TSMC
Bloomberg reports that OpenAI, the fast-growing company behind ChatGPT, is working with Broadcom Inc. to develop a new artificial intelligence chip specifically focused on running AI models after they’ve been trained, according to two people familiar with the matter. The two companies are also consulting with Taiwan Semiconductor Manufacturing Company(TSMC) the world’s largest chip contract manufacturer. OpenAI has been planning a custom chip and working on its uses for the technology for around a year, the people said, but the discussions are still at an early stage. The company has assembled a chip team of about 20 people, led by top engineers who have previously built Tensor Processing Units (TPUs) at Google, including Thomas Norrie and Richard Ho.
Reuters reported on OpenAI’s ongoing talks with Broadcom and TSMC on Tuesday. It has been working for months with Broadcom to build its first AI chip focusing on inference (responds to user requests), according to sources. Demand right now is greater for training chips, but analysts have predicted the need for inference chips could surpass them as more AI applications are deployed.
OpenAI has examined a range of options to diversify chip supply and reduce costs. OpenAI considered building everything in-house and raising capital for an expensive plan to build a network of chip manufacturing factories known as “foundries.”
REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights
OpenAI may continue to research setting up its own network of foundries, or chip factories, one of the people said, but the startup has realized that working with partners on custom chips is a quicker, attainable path for now. Reuters earlier reported that OpenAI was pulling back from the effort of establishing its own chip manufacturing capacity. The company has dropped the ambitious foundry plans for now due to the costs and time needed to build a network, and plans instead to focus on in-house chip design efforts, according to sources.
OpenAI, which helped commercialize generative AI that produces human-like responses to queries, relies on substantial computing power to train and run its systems. As one of the largest purchasers of Nvidia’s graphics processing units (GPUs), OpenAI uses AI chips both to train models where the AI learns from data and for inference, applying AI to make predictions or decisions based on new information. Reuters previously reported on OpenAI’s chip design endeavors. The Information reported on talks with Broadcom and others.
The Information reported in June that Broadcom had discussed making an AI chip for OpenAI. As one of the largest buyers of chips, OpenAI’s decision to source from a diverse array of chipmakers while developing its customized chip could have broader tech sector implications.
Broadcom is the largest designer of application-specific integrated circuits (ASICs) — chips designed to fit a single purpose specified by the customer. The company’s biggest customer in this area is Alphabet Inc.’s Google. Broadcom also works with Meta Platforms Inc. and TikTok owner ByteDance Ltd.
When asked last month whether he has new customers for the business, given the huge demand for AI training, Broadcom Chief Executive Officer Hock Tan said that he will only add to his short list of customers when projects hit volume shipments. “It’s not an easy product to deploy for any customer, and so we do not consider proof of concepts as production volume,” he said during an earnings conference call.
OpenAI’s services require massive amounts of computing power to develop and run — with much of that coming from Nvidia chips. To meet the demand, the industry has been scrambling to find alternatives to Nvidia. That’s included embracing processors from Advanced Micro Devices Inc. and developing in-house versions.
OpenAI is also actively planning investments and partnerships in data centers, the eventual home for such AI chips. The startup’s leadership has pitched the U.S. government on the need for more massive data centers and CEO Sam Altman has sounded out global investors, including some in the Middle East, to finance the effort.
“It’s definitely a stretch,” OpenAI Chief Financial Officer Sarah Friar told Bloomberg Television on Monday. “Stretch from a capital perspective but also my own learning. Frankly we are all learning in this space: Infrastructure is destiny.”
Currently, Nvidia’s GPUs hold over 80% AI market share. But shortages and rising costs have led major customers like Microsoft, Meta, and now OpenAI, to explore in-house or external alternatives.
References:
AI Echo Chamber: “Upstream AI” companies huge spending fuels profit growth for “Downstream AI” firms
AI Frenzy Backgrounder; Review of AI Products and Services from Nvidia, Microsoft, Amazon, Google and Meta; Conclusions
AI sparks huge increase in U.S. energy consumption and is straining the power grid; transmission/distribution as a major problem
Generative AI Unicorns Rule the Startup Roost; OpenAI in the Spotlight