SAN JOSE, California (AP) — Two chief executive officers in the technology sector, striving to ramp up production of advanced chips essential for artificial intelligence, convened for a collaborative session on Wednesday, while the initial frontrunner in the thriving market posted another quarter of remarkable growth.
The dialogue between Intel’s CEO Pat Gelsinger and OpenAI’s CEO Sam Altman took place at a convention center in San Jose, California, shortly after Nvidia announced a nearly fourfold increase in revenue for the November-January period compared to the previous year.
Intel, a longstanding player in Silicon Valley facing recent challenges, outlined its strategies to catch up with Nvidia during a comprehensive conference. Gelsinger commenced the event with an opening address outlining his vision of the fervent demand for AI-driven chips reinvigorating the company in a surge he termed the “Siliconomy.”
“The way these minuscule chips are driving the contemporary economic cycle is truly remarkable,” remarked Gelsinger.
OpenAI, a startup based in San Francisco supported by Microsoft, has emerged as a prominent player in the technology realm since introducing its groundbreaking AI innovation, ChatGPT, in late 2022. Altman is now eager to advance further while competing with tech giants like Google, Anthropic, and Inflection AI. However, the advancements he envisions will necessitate significantly more processing power than is presently available.
The disparity between supply and the insatiable demand for AI chips underscores Altman’s keen interest in securing additional funding to scale up the industry’s manufacturing capacity. During his conversation with Gelsinger, he evaded a query about potentially raising up to $7 trillion, an amount surpassing the combined market value of Microsoft and Apple, as reported by The Wall Street Journal.
“The crux of the matter is that we anticipate a substantial increase in the need for AI compute,” stated Altman. “This will entail a global investment in various areas beyond our current contemplation. We are not at a stage where we have concrete figures yet.”
Altman underscored the significance of sustaining the momentum in AI from the past year to drive forward a technology that he believes will pave the way for a brighter future for humanity, while acknowledging there may be challenges along the journey.
“We are moving towards a future where AI-generated content will surpass human-generated content,” Altman observed. “This narrative will not only be positive but will ultimately be a net positive.”
Arguably, no company is reaping greater rewards from the AI boom than Nvidia. The three-decade-old chipmaker has surged to the forefront of technology due to its early strides in producing the graphics processing units (GPUs) essential for powering popular AI applications like ChatGPT and Google’s Gemini chatbot.
Nvidia has witnessed a remarkable growth spurt over the past year, generating over $1.3 trillion in shareholder value in less than 14 months. This achievement has propelled it to become the fifth most valuable publicly traded company in the United States, trailing only Microsoft, Apple, Amazon, and Alphabet Inc., Google’s parent company.
Conversely, Intel has been striving to persuade investors that Gelsinger has put the Santa Clara-based company on a path to recovery three years after assuming the role of CEO.
Since taking the helm, Gelsinger has steered the company into chip manufacturing for other entities and has allocated $20 billion towards constructing new facilities in Ohio as part of its foray into operating “foundries” for third parties.
During the conference on Wednesday, Gelsinger forecasted that by 2030, Intel would oversee the world’s second-largest foundry business, presumably trailing behind the current leader, Taiwan Semiconductor Manufacturing Co. (TSMC), largely by meeting the demand for AI chips.
“There’s almost a race to space happening,” Gelsinger remarked to reporters after delivering the keynote address at the conference. “The overall demand for AI chips seems to be insatiable for several years to come.”
However, Gelsinger’s efforts to revamp Intel have yet to resonate with investors. The company’s stock price has declined by 30% during his tenure, while Nvidia’s shares have surged nearly fivefold over the same period.
Intel is also vying for a portion of the \(52 billion allocated by the U.S. Commerce Department to bolster the country’s manufacturing capacity in the \)527 billion processor market, based on global sales figures from the previous year.
To date, less than $2 billion from the 2022 CHIPs and Science Act funds has been disbursed, but Commerce Secretary Gina Raimondo, in a virtual appearance at Wednesday’s conference, assured of “a steady stream” of announcements regarding additional funding distribution.
Raimondo also shared her astonishment at the scale to which the AI market could expand, following recent discussions with Altman and other leaders spearheading the AI revolution.
“The scale of chips they anticipate needing is mind-boggling,” she remarked.
