OpenAI teams up with Foxconn to develop AI infrastructure hardware in US. Details here

OpenAI is collaborating with Hon Hai Precision Industry Co. to design and produce hardware for data centres. This is the latest effort by the creator of ChatGPT to address its growing demand for infrastructure to support AI systems.

Hon Hai, also called Foxconn, will partner with OpenAI to co-design and develop data centre server racks, aiming to boost its manufacturing operations across the US. Additionally, Foxconn plans to produce cabling, power systems, and other essential data centre equipment domestically.

The companies noted that the agreement with OpenAI does not entail any specific purchase commitments.

“We’re announcing a collaboration with Hon Hai Technology Group (Foxconn) focused on design work and US manufacturing readiness for the next generation of AI infrastructure hardware. As part of this work, OpenAI will share insight into emerging hardware needs across the AI industry to help inform Foxconn’s design and development efforts for hardware to be manufactured at Foxconn’s US facilities,” OpenAI said in a statement.

OpenAI's multibillion-dollar deals

In the past few months, OpenAI has finalised a series of multibillion-dollar deals with cloud computing providers and chipmakers, including Nvidia Corp. and Advanced Micro Devices Inc., to increase its data centre footprint.

Meanwhile, the US-based company has moved to increase its control over the AI supply chain by agreeing in October to purchase chips and components from Broadcom Inc. However, the planned surge in spending has raised worries about an AI bubble, Bloomberg reported.

For Foxconn, the recent agreement highlights a longer-term goal to expand its involvement in the AI ecosystem, partly to reduce its dependence on assembling iPhones for Apple Inc. A direct partnership with OpenAI indicates that the Taiwanese firm is eager to assist clients in incorporating their own designs into data centres.

“This partnership is a step toward ensuring the core technologies of the AI era are built here,” OpenAI Chief Executive Officer Sam Altman said in a statement. “This work will strengthen US leadership and help ensure the benefits of AI are widely shared.”

OpenAI has dedicated much of this year to partnering with Oracle Corp. and SoftBank Group Corp. on a bold plan to invest $500 billion in US data centres and AI infrastructure over the coming years, Bloomberg reported. This initiative was announced shortly after President Donald Trump resumed office.

Foxconn, involved in the Stargate project, is already increasing AI server manufacturing in the US, aligning with the administration's key demand and reducing tariff risks. However, the actual benefit of the OpenAI partnership for Foxconn remains uncertain. Altman has stated that his company plans to invest $1.4 trillion in AI infrastructure, a substantial investment for any company.