The UAE will likely help fund OpenAI’s self-produced chips

According to a report by the Financial Times, OpenAI’s ambition to develop its own semiconductor chips to power advanced AI models may receive support from the United Arab Emirates (UAE).

The report said MGX – a state-backed conglomerate in Abu Dhabi – is in discussions to support OpenAI’s project to build an in-house AI chip. This information comes from two individuals with knowledge of the discussions.

To achieve its goal of in-house semiconductor chip production, OpenAI is said to be seeking investments worth trillions of dollars from investors around the world. By producing its own chips, the San Francisco-based company aims to reduce its dependence on Nvidia, the current global leader in semiconductor chip technology.

As part of its capital raising efforts, OpenAI signed a deal with Thrive Capital in February 2023 that reportedly raised the company’s valuation to more than $80 billion, marking a nearly threefold increase in in less than 10 months.

This comes as the UK semiconductor sector gains greater access to research funding through participation in the EU’s ‘Chips Joint Undertaking’.

UK participation in Chips Joint Undertaking provides the UK semiconductor industry with better access to €1.3 billion of funding allocated from Horizon Europe to support research in semiconductor technology until 2027 . The move is backed by an initial £5m funding from the UK Government this year, with a further £30m to support further UK research engagement from 2025 to 2027 .

Technology Minister Saqib Bhatti said: “Joining the Chips Joint Undertaking will leverage the UK’s strengths in semiconductor science and research to secure our place in the global chip supply chain. This highlights reinforces our steadfast commitment to pushing the boundaries of technology and reinforces our important role in shaping the future of semiconductor technology worldwide.”

Back in the UAE, MGX – the group behind the potential investment in OpenAI – is an AI-focused fund launched earlier this week and led by UAE National Security Advisor Sheikh Tahnoon Bin Zayed al-Nahyan. top. The fund was launched in partnership with G42 and Mubadala, with G42 having partnered with OpenAI in October 2023 to expand the company’s operations in the Middle East.

In the partnership agreement with G42, OpenAI CEO Sam Altman stated that they plan to bring AI solutions to the Middle East “tailored to the nuances of the region.”

One of the sources briefed on the MGX fund emphasized, “They are aiming to create a structure that puts Abu Dhabi at the center of this AI strategy with global partners around the world.”

With the race to develop advanced semiconductor technology increasingly fierce, both the UAE and the UK-EU are positioning themselves as key players.