Altman invested billions in AI chip investments before OpenAI was ousted

(Bloomberg) — Sam Altman’s shock firing from OpenAI came just weeks after he had been aggressively trying to raise billions of dollars from some of the world’s biggest investors, according to people familiar with the matter. , for a new chip company.

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Altman has been traveling to the Middle East to raise funds for the project, codenamed Tigris, people familiar with the matter said. The OpenAI CEO plans to launch a chip company focused on artificial intelligence that can produce semiconductors that compete with Nvidia chips. Altman’s chip joint venture has not yet been formed and talks with investors are in the early stages, people familiar with the matter said. It currently occupies a dominant position in the artificial intelligence task market.

Altman has also been seeking to raise funding for a hardware device focused on artificial intelligence that he developed in collaboration with former Apple design director Jony Ive. Altman has teamed up with SoftBank Group Corp, Saudi Arabia’s Public Investment Fund, Mubadala Investment Co and others to seek tens of billions of dollars in funding for the new companies, people familiar with the matter said.

The scale and focus of Altman’s chip ambitions and many details of the project’s codename have not been previously reported.

Altman’s funding comes at an important time for the AI ​​startup. OpenAI has been working to finalize a tender offer led by Thrive Capital that would allow employees to sell their shares at a valuation of $86 billion. SoftBank and other companies had hoped to be part of the deal, but was put on a waiting list for a similar deal later, a person familiar with the matter said. In the interim, Altman urged investors to consider his new venture, two people said.

Representatives of Saudi Arabia’s PIF did not immediately respond to a request for comment. OpenAI, SoftBank and Mubadala declined to comment.

OpenAI said on Friday that Altman was removed from his role after an internal review found “he was consistently dishonest in his communications with the board.” The board and Altman were at odds over AI safety, the speed of technology development and Altman’s ambitions and side hustles, complicating an already tense relationship with the board, according to a person familiar with the matter.

OpenAI chief operating officer Brad Lightcap said in a memo to employees: “We can state unequivocally that the board’s decision is not directed at malfeasance or any conduct related to our financial, business, security or security/privacy practices. Sam and the board There was a breakdown in communication.”

Currently, the OpenAI board of directors is facing pressure from investors to reinstate Altman. One possibility is the resignation of the board of directors, but even if Altman returns, he may still need to handle his side projects with the consent of the OpenAI board of directors.

Altman is pitching a startup that aims to build tensor processing units (TPUs), semiconductors designed to handle large numbers of specialized artificial intelligence workloads. The goal is to provide lower-cost competition to the existing Nvidia in the market, according to people familiar with the matter, and to help OpenAI by reducing the ongoing costs of running its own services such as ChatGPT and Dall-E.

Custom-designed chips like TPU are thought to have the potential to one day outperform the AI ​​accelerators made by Nvidia—which AI companies covet—but development times are long and complicated.

Many well-known venture capital firms, including some existing investors in OpenAI, are ready to back any new venture capital firm Altman forms, people familiar with the matter said. Microsoft, OpenAI’s largest investor, is also interested in backing Altman’s Chip Ventures, according to people familiar with the matter. Microsoft declined to comment.

In a statement on X (formerly Twitter), venture capitalist Vinod Khosla said his company hopes Altman “returns to OpenAI, but will support him in whatever he does next.”

–With assistance from Dina Bass and Rachel Metz.

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