OpenAI's Sam Altman Eyes Alliance with Korean Giants to Challenge Nvidia's Dominance

Sam Altman, CEO of OpenAI, visited Seoul last week to meet with top executives from Samsung Electronics and SK Hynix, the world's top two memory chipmakers, fueling speculation that the "father of ChatGPT" is looking for allies to compete with Nvidia, the unrivaled market leader in AI chips.

Will OpenAI and Korean Chipmakers Join Forces to Take on Nvidia?

According to industry analysts, being a part of a potential alliance would allow Samsung and SK to lift their game in the fierce rivalry for next-generation chips.

“OpenAI aims to take the lead in the AI era by combining its software power with an extensive hardware network,” Lee Jong-hwan, a system semiconductor engineering professor at Sangmyung University, stated.

Altman's high-profile visit follows press reports that OpenAI plans to manufacture its own AI processors and acquire greater control over supply chains. Nvidia currently produces over 90% of supplies.

The rising need for AI technology is boosting sales of graphics processing units, which may speed up the workloads of complicated AI calculations via parallel processing. Fabless firms, like OpenAI, are spending a lot of money to get Nvidia's powerful but expensive GPUs.

Nvidia's top-of-the-line A100 chips, for example, cost $25,000 each. Because of its scarcity, major technology companies are lining up to place orders. OpenAI is known to have purchased over 10,000 units.

Chip Shortage Concerns Prompt Strategic Discussions Between Sam Altman and Semiconductor Giants

Altman has regularly expressed concern about chip shortages. Bloomberg believes that the sector must move now to ensure a sufficient supply by the end of the decade.

Altman has begun discussions with Samsung and SK about the exceedingly complex task of chip production, following similar talks with Intel and Taiwan's TSMC.

"The two Korean chip behemoths are No. 1 and No. 2 in the global memory chip market. Samsung and SK hynix would likely take charge of developing and producing memory chips if they join the envisioned AI alliance," an industry official said on condition of anonymity.

According to industry sources, one of the main topics discussed at their meetings was high bandwidth memory, or HBM chips, which are the most modern memory chips used to process massive amounts of data.

In 2022, SK Hynix became the first business to offer Nvidia its four-generation HBM product, HBM3. The extended version HBM3E is slated to go into mass production in the first half of this year. Samsung is also boosting OLED output. Currently, the two Korean companies produce more than 90% of global supplies.

A potential agreement with OpenAI might benefit Samsung's foundry division, allowing it to compete with TSMC.

According to TrendForce, TSMC dominated the global foundry market in the third quarter of 2023, accounting for 57.9 percent of sales, while Samsung remained a distant second with a 12.4% market share.

Even though Samsung created the next-generation Gate-All-Around transistor design, the most advanced chip-manufacturing technology, faster than its competitors, it continues to struggle to secure orders from major clients such as Apple, Nvidia, and Qualcomm.

Sam Altman's Intensive Seoul Agenda: High-Level Talks at Leading Semiconductor Sites

Altman's 19-hour trip in Seoul was busy with meetings and site visits. He arrived late Thursday and began a hectic schedule on Friday, as per the Korea Herald. He went to Samsung's Pyeongtaek Campus, the world's largest semiconductor manufacturing plant, which spans around 500 soccer fields and spoke with representatives from the tech giant's chip business divisions.

In the afternoon, he met with SK Group Chairman Chey Tae-won and SK Hynix CEO Kwak Noh-jung in Seoul. Later in the day, he reportedly met for dinner with Samsung Electronics Vice Chairman Kyung Kye-hyun, one of the co-CEOs in charge of chip businesses.

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