AI Infrastructure: Behind OpenAI’s bold plan to make AI flow like electricity

At the end of last year, Sam Altmanexecutive director of OpenAIbegan to present a bold plan that he hoped would create the computing power his company needed to build more powerful artificial intelligence.

In meetings with investors in the United Arab Emirates, computer chip makers in Asia and officials in Washington, he proposed that they join together in a multibillion-dollar effort to build new computer chip factories and data centers around the world, including the Middle East. Although some participants and regulators opposed some parts of the plan, talks continued and expanded to Europe and Canada.

OpenAI’s plan for the world’s technological future, which was described to the New York Times by nine people close to the company’s discussions, would create countless data centers that would provide a global reserve of computing power dedicated to building the next generation of AI.

As far-fetched as it may seem, Altman’s campaign showed how in just a few years he has become one of the most influential technology executives in the world, capable in a span of weeks of gaining an audience with money from the Middle East, Asian manufacturing giants and leading US regulators.

It was also a demonstration of the tech industry’s determination to accelerate the development of a technology it claims could be as transformative as the Industrial Revolution.

When news leaked that Altman, 39, was seeking trillions of dollars, he was mocked for seeking investments equal to about a quarter of America’s annual economic output. Officials in Washington also expressed concern that an American company was trying to build vital technology in the Middle East. to build artificial intelligence infrastructure In several countries, U.S. companies would need approval from U.S. officials who oversee export controls.

Altman has since scaled down his ambition to hundreds of billions of dollars, the nine people said, and devised a new strategy: Courting U.S. government officials by first helping to build data centers in the United States. It’s still unclear how all this would work. OpenAI has attempted to form a loose federation of companies, including data center builders like Microsoft, as well as investors and chip makers. But the details of who would pay the money, who would receive it and what they would build are murky.

At the same time, OpenAI has been in separate talks to raise $6.5 billion to back its own business, a deal that would value the startup at $150 billion. United Arab Emirates technology investment firm MGX is among the group of potential investors, which also includes Microsoft, Nvidia, Apple and Tiger Global, three people familiar with the talks said.

OpenAI is seeking cash because its costs far exceed its revenue, the three people said. It annually brings in more than $3 billion in sales and spends about $7 billion.

Some of OpenAI’s plans have been previously reported by Bloomberg, The Wall Street Journal and Reuters. Conversations with the nine people close to the talks, who requested anonymity because they are not authorized to speak to the media, provide a fuller picture of the efforts and how the strategy has evolved.

(The Times sued OpenAI and Microsoft in December for copyright infringement of news content related to artificial intelligence systems.)

In private conversations, Altman compared the world’s data centers to electricity, according to three people close to the discussions. As electricity became more widely available, people found better ways to use it. Altman hoped to do the same with data centers and eventually make AI technologies flow like electricity.

Chatbots like OpenAI’s ChatGPT learn their skills by analyzing large amounts of digital data. But there is a shortage of chips and data centers to power this process. If that offering grows, OpenAI believes it can build more powerful AI systems.

In dozens of meetings, OpenAI executives have pressed tech companies and investors to expand global computing power, the nine people close to the company discussions said.

“Sam is thinking about how OpenAI remains relevant,” said Daniel Newman, CEO of Futurum Group, a technology research firm. “You need more computing, more connectivity, more power.”

Altman’s original plan called for the United Arab Emirates to finance the construction of multiple chip manufacturing plants, which can cost up to $43 billion each. The plan would reduce chip manufacturing costs for companies such as Taiwan Semiconductor Manufacturing Co., the world’s largest chip producer.

TSMC makes semiconductors for Nvidia, the leading developer of AI chips. The plan would allow Nvidia to produce more chips. OpenAI and other companies would use those chips in more AI data centers.

Altman and his colleagues discussed building data centers in the United Arab Emirates, a nation with excess electrical power. In the United States, companies have found it difficult to build new data centers because there is not enough electrical power to operate them.

OpenAI discussed financing the infrastructure plan with MGX, an AI-focused investment vehicle created by the United Arab Emirates. He also met with TSMC, Nvidia and another chip company, Samsung.

Omar Sultan Al Olama, the UAE’s minister of state for AI, told the Times in an interview in March that “there is a business case” for pursuing such a mammoth deal.

Nvidia declined to comment. MGX and Samsung did not respond to requests for comment.

OpenAI said in a statement that it was focused on building infrastructure in the United States “with the goal of ensuring that the United States remains the world leader in innovation, driving reindustrialization across the country, and ensuring that the benefits of AI are widely accessible.” .

TSMC spokesman Will Moss said the company was open to discussions about expanding semiconductor development but was focusing on its current global expansion projects and had “no new investment plans to disclose at this time.” .

When Altman visited TSMC’s headquarters in Taiwan shortly after beginning his fundraising effort, he told his executives that it would take $7 trillion and many years to build 36 additional semiconductor plants and data centers to fulfill his vision. said two people briefed on the conversation. It was his first visit to one of the multimillion-dollar plants.

TSMC executives found the idea so absurd that they started calling Altman a “podcasting bro,” one of these people said. Adding just a few more chip manufacturing plants, let alone 36, was incredibly risky because of the money involved.

“We are not and have not been considering multi-billion dollar projects. While the total investment required for everyone to fully build out the global AI infrastructure could cost trillions over several decades, what OpenAI is specifically exploring is at the scale of hundreds of thousands of million,” said Liz Bourgeois, spokesperson for OpenAI.

Around the same time, Altman visited South Korea and held talks with two of the country’s chipmakers: Samsung and SK Hynix. But it soon ran into national security concerns over the United Arab Emirates’ prominent role in developing a technology many see as critical to the economy and warfare.

Some White House officials and congressional leaders fear that approving infrastructure to be built in the United Arab Emirates could give China a backdoor to important technologies. National security researchers have found evidence that some universities in the United Arab Emirates have worked with Chinese universities with ties to Beijing’s military, said Sihao Huang, technology fellow at RAND Corp.

Talks continue with the Commerce Department, the United Arab Emirates and chipmakers. OpenAI has also expanded its discussions to other parts of the world, according to four people familiar with those conversations.

In the spring, company executives met with Japanese officials in Tokyo. They presented a plan to build data centers powered by electricity from nuclear power plants that were decommissioned after the Fukushima disaster in 2011.

During one meeting, a Japanese official laughed when OpenAI said it was seeking 5 gigawatts of electrical power, about a thousand times the energy consumed by an average data center, said a person familiar with the meeting.

Later, in meetings with officials in Germany, OpenAI explored building a data center in the North Sea so it could harness 7 gigawatts of energy from offshore wind turbines, the person said.

But political pressures have forced OpenAI to explore options in the United States. During a White House meeting with other tech leaders this month, Altman presented an OpenAI study called “Infrastructure is Destiny.”

The study called for new data centers in the United States, two people familiar with the meeting said. Built at a cost of $100 billion each (about 20 times the cost of today’s most powerful data centers), they would house 2 million AI chips and consume 5 gigawatts of electricity.

As he spoke, Altman sat in front of a portrait of President Franklin D. Roosevelt, who poured money into huge infrastructure projects such as New York’s Lincoln Tunnel, two people familiar with the discussion said. The head of OpenAI told White House officials, including Commerce Secretary Gina Raimondo and Jake Sullivan, the national security adviser, that AI data centers would be a catalyst for America’s reindustrialization, creating up to 500,000 jobs.

Altman also warned that the United States risked falling behind China and that if the United States did not work with the United Arab Emirates, China would.

This week, President Joe Biden and Sheikh Mohammed bin Zayed, president of the United Arab Emirates, met at the White House and directed their senior officials to draft a memorandum detailing future collaboration on AI.

To bolster its efforts, OpenAI hired Chris Lehane, a Clinton White House lawyer, as vice president of global policy, along with two people from the Commerce Department who worked on the CHIPS Act, a bipartisan law designed to increase domestic manufacturing. of chips. One of them will manage future infrastructure policies and projects.

Speaking last week at an investor event for T-Mobile, which is an OpenAI customer, Altman struck a modest tone about the company’s ambitions.

“We are building on a gigantic amount of work that has come before us,” he said. “If you think about everything that had to happen throughout human history to discover semiconductors and build chips and networks and these massive data centers, we’re just doing our little bit on top of that.”