Hey Everyone,
Editor’s note: I have a bad case of Covid I’m struggling with and it may materially impact my writing across my Newsletters this week, just to let you know.
I’m having some difficulty keeping up with OpenAI Fund’s and Sam Altman’s fundraising genius and how it will materially impact the business of OpenAI and the Generative AI industry as a whole.
The global generative AI market is expected to grow at a compound annual growth rate of 35.6% from 2023 to 2030 to reach USD 109.37 billion by 2030.
While Microsoft and OpenAI are in discussions to fund robots, by way of injecting $500 million into humanoid robotics startup Figure AI, the A.I. chips bottleneck might be solved by Middle Eastern oil money to the tune of Trillions of dollars. How can this be?
Due to potential geopolitical risk of China invading Taiwan where TSMC is located, Sam Altman and others are rushing to find a solution for U.S. interests it now appears. TSMC has been the world’s number one contract maker of chips for years, but its earnings have long been significantly below those of Intel and other leading memory makers. However, a lot has changed in recent years, and in 2023, TSMC’s revenue exceeded that of Intel and Samsung, as observed by Dan Nystedt, a Taiwan-based analyst.
2023 Revenue in US dollars
TSMC: $69.30 billion
Intel: $54.23 billion
Samsung (chip division): $50.99 billion
Ironically this puts Taiwan as even more of a significant bottleneck for the global economy and the conflict between China and Western allies in focus. Samsung is expected to begin mass production of 2-nanometre chips next year in South Korea, while TSMC will do so in Taiwan. In an East Asian conflict these are locations that are open to disruption which would wreck havoc on the global economy.
ChatGPT creator OpenAI has achieved a revenue milestone of $2 billion in December 2023 but it’s future still depends in part on getting even more funding and obtaining enough A.I. chips from Nvidia to keep leading the field in LLMs with GPT-5.
The amount that Sam Altman is reportedly seeking to raise from Abu Dhabi-based G42, Japan’s SoftBank, Microsoft, the UAE to build out all those neural-network accelerator fabs is roughly 130 times Nvidia’s LTM revenue, which was around $45 billion.
Nvidia for its progress as a Santa Clara, California-based company, now controls around 80% of high-end AI chip market, a position that has sent its stock market value up 40% so far this year to market cap of $1.73 trillion and it could soon overtake the market valuation of Amazon, to enter 5th place.
This makes Sam Altman’s idea and the semiconductor industry in particular, something really interesting to watch in 2024:
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