Last winter, OpenAI CEO Sam Altman took a whirlwind tour of the Far East, meeting with high-powered execs from companies like TSMC, Samsung, and SK Hynix, but he didn't make the best first impression. According to a report in the New York Times this week, senior TSMC execs allegedly dubbed the OpenAI chief a “podcasting bro” after the meeting(s) after his absurd requests for 36 new chipmaking plants that would cost an astounding $7 trillion. The NYT claims it discussed OpenAI's negotiations with nine people close to the discussions but who wish to remain anonymous.
Altman used his multi-stop trip to pitch his plans to progress AI, involving Asia's manufacturing muscle, Middle Eastern money, and U.S. regulators. The NYT sources say that the scale of investment would be in trillions of dollars – similar in size to a quarter of U.S. annual output for a year. However, the latest OpenAI statements have rolled back such talk to "mere" hundreds of billions. It is reported that years of construction time would also be needed to satisfy the OpenAI compute scaling plans.
Moonshot dreams crash to earth at TSMC
The OpenAI CEO is noted for his ambition. Perhaps Altman is right to have an abundance of confidence in his vision and moonshot-style plans after taking just a few years to become one of the most influential names in tech. Nevertheless, his plans have allegedly not stirred confidence in the hard-nosed execs at TSMC.
The NYT report claims that during Altman’s visit to Taiwan, he told TSMC execs that he envisioned a $7 trillion investment over several years. The result would be 36 new semiconductor plants and data centers driving AI forward. TSMC execs allegedly found Altman’s ideas absurd, and according to one of the NYT’s sources, the chipmaking execs subsequently called Altman a “podcasting bro.” Even implementing a fraction of the OpenAI CEO’s ideas would be incredibly risky, the execs are said to have openly pondered.
This dismissive attitude to OpenAI’s ambition dovetails with a report we published this summer. During TSMC’s 2024 Annual Shareholders' Meeting, newly elected chairman Dr. C. C. Wei was quoted as making several controversial statements. On the OpenAI CEO, Wei is quoted as saying, "Sam Altman, he’s too aggressive, too aggressive for me to believe."
Altman also visited South Korea to talk with high-level Samsung and SK hynix representatives at around the same time. However, negotiations were cut short by national security concerns, indicates the NYT, as back then, countries like the United Arab Emirates (UAE) maintained relationships with China.
Things may be different for tech plans involving the UAE now, as earlier this week, President Biden and Sheikh Mohammed bin Zayed, the Emirati president, met at the White House and directed their senior officials to develop a memorandum detailing future collaboration on AI. Earlier this week, we reported on the latest rumors regarding TSMC and Samsung mega factories in the UAE.
The NYT highlights a lot of uncertainty about OpenAI’s incredibly ambitious plans. Details about who would put in what, and what they would get from their investments, remain hazy. However, firms such as the Emirates tech investment specialist MGX, plus household tech titans like Microsoft, Nvidia, and Apple, were named as still being in talks with OpenAI.
AI continues to be a money pit with no killer app
OpenAI’s business model, as it exists today, doesn’t really inspire confidence, as it seems to exist on the promise of ‘jam tomorrow.’ Specifically, the firm has an income of approximately $3 billion per year, which is put in deep shade by its $7 billion annual expenditure.
Altman’s grand plan seems to stem from his theory that AI will be like electricity. As AI becomes more readily available, people will find more and better ways to use it. But at the time of writing, leading tech companies can’t find a killer app for AI. Microsoft’s Copilot gaffes and delays are well documented. Likewise, Apple launched its iPhone 16 and 16 Pro earlier in the month with a lot of talk about Apple Intelligence, but the first of these AI features won’t be available on the new devices until next month.
