NVIDIA grip loosens as OpenAI nears completion of custom AI chip

NVIDIA is currently the only supplier of high-end AI hardware, but that is about to change as OpenAI is reportedly nearing completion of its first generation, in-house AI-dedicated silicon.

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The news comes from an exclusive report from Reuters that states the ChatGPT maker is currently in the midst of finalizing the design for its first in-house AI chip, and over the next few months, the design will be locked and sent over to the Taiwan Semiconductor Manufacturing Co (TSMC) for fabrication. OpenAI previously set a goal of hitting mass production of its own AI hardware sometime in 2026, and according to the report, these plans coincide with that timeline and illustrate the ChatGPT marker is on track for hitting them.

Despite OpenAI nearing the design completion for the chip, the challenges don't stop there as the first chip design will take approximately 6 months to produce, cost tens of millions of dollars, and there's no guarantee the silicon will function as intended. A failure in the first generation of silicon will mean OpenAI will need to take the design back to the drawing board, assess where it went wrong, and repeat the whole process all over again.

According to sources that spoke with Reuters, OpenAI's chip will be training-focused and is internally viewed as a tool to strengthen OpenAI's negotiating leverage with other chip suppliers, such as NVIDIA. Notably, OpenAI's AI-chip development team is being helmed by Richard Ho, who joined OpenAI more than a year ago after transitioning from Google, where he assisted in the company's custom AI chip program.