Altman seeks OK to fundraise for AI chips
Openai Chief Executive Officer Sam Altman is working to secure U.S. government approval for a massive venture to boost global manufacturing of artificial intelligence chips, an effort that risks raising national security and antitrust concerns in Washington, according to people familiar with the matter.
Altman has been meeting with potential investors and partners in the U.S., Middle East and Asia over the past few weeks, but he has told some of them that he can’t move forward without a green light from Washington, said the people, who asked not to be named discussing confidential conversations.
Altman, a familiar face in DC after repeated visits to Capitol Hill to advocate his AI agenda, is now trying to get U.S. officials on board with a plan to turbocharge semiconductor production with financing in part from the Middle East. He aims to raise billions of dollars to dramatically increase the world’s capacity to make cutting-edge computing chips, staving off a shortfall he worries will interfere with wide-scale deployment of AI and continued development of the field, Bloomberg reported last month.
Taiwan Semiconductor Manufacturing Co., Intel Corp. and Samsung Electronics Co. are the main companies that fabricate such chips and thus possible partners for Altman’s effort. Bloomberg reported he met with Samsung executives last month and the Financial Times reported he met with TSMC. He has spoken with Middle Eastern sovereign wealth funds about potential investments, Bloomberg has reported, including from the United Arab Emirates.
‘Productive discussions’
Altman has indicated he believes it’s essential to work collaboratively with the U.S. government on approvals, timing
and structure for the venture, according to one person familiar with the matter, who asked not be named discussing private conversations. The CEO has met with Commerce Secretary Gina Raimondo and is working to arrange meetings with other officials, the people said, and Commerce officials have held internal discussions on Openai’s Middle East ambitions. The Wall Street Journal previously reported that the two had met.
“Openai has had productive discussions about increasing global infrastructure and supply chains for chips, energy, and data centers — which are crucial for AI and other industries that rely on them,” the company said in a statement. “We will continue to keep the U.S. government informed given the importance to national priorities, and look forward to sharing more details at a later date.”
A Commerce spokesperson said Raimondo meets with a
wide array of industry leaders, and the agency does not disclose details of individual conversations.
Altman’s ambitious fundraising push risks triggering a national security review of foreign investment by a committee chaired by the Treasury Department and could run up against the Commerce Department’s controls on chip shipments to the Middle East.
Altman is also considering whether to create and issue equity in a new company, separate from Openai, some of the people said, in a move that might raise antitrust concerns. That’s part of why the plan needs U.S. government approval before moving forward.
U.S. law forbids the same person from serving as a board director or officer at two companies that directly compete, and the Biden administration has amped up scrutiny of those socalled interlocking directorates.
It is not known whether Openai would contribute funds or have a formal relationship with the new startup, but antitrust enforcers at the Federal Trade Commission or Department of Justice may have concerns about Altman’s involvement should the new company seek to make chips exclusively for use by Openai.
The FTC, Treasury Department and Justice Department declined to comment.
National security concerns
Altman’s exact plan remains in flux. The executive is looking to the market for signals to determine whether to focus on a less extensive effort to build lower-level chips and software, or aim for a massive overhaul of chip manufacturing capacity, said the people. Those decisions will determine how much money Altman must raise.
Recently, Altman has also begun considering whether the project should tackle ways to boost the available supply of green energy for AI chip manufacturing, a step that would increase the price tag further, said two of the people.
By pursuing foreign investment from entities like the United Arab Emirates wealth fund, Altman could draw scrutiny from the Committee on Foreign Investment in the United States, the people said, which has paid increasingly close attention to Middle Eastern wealth funds’ ties to China. Lawmakers have also been particularly focused on Abu Dhabi AI firm G42, a potential investor in the chip venture, over concerns about its ties to China. The company recently said it will pare back its China presence in a pivot to the U.S.
Establishing actual semiconductor facilities in the region poses a unique challenge, too. The U.S. in October expanded its controls on semiconductor shipments to China to cover much of the Middle East, over concerns that countries like Saudi Arabia and the United Arab Emirates could serve as conduits for Chinese firms to access otherwise-restricted chips — or the capabilities of those chips via the cloud. Under the new rules, sales of certain advanced chips and semiconductor equipment to facilities in those countries would require a U.S. government license.
Altman’s plan might also create a new wrinkle for the Commerce Department as it doles out around $100 billion worth of semiconductor subsidies from the 2022 Chips Act. The money, which aims to incentivize chipmaking on U.S. soil, comes with strings attached, from limits on stock buybacks to restrictions on investing in China. It’s unclear if Altman’s endeavor complements — or competes with — that effort.
Commerce has only announced two small grants so far, but multi-billion dollar awards are expected in the coming weeks to support advanced chipmaking facilities like those under construction by TSMC, Samsung and Intel.