Sam Altman was in talks to raise billions for an AI chip venture before spinning off OpenAI

In the weeks before his shocking ouster from OpenAI, Sam Altman was actively working to raise billions of dollars from some of the world’s biggest investors for a new chip venture, according to people familiar with the matter.

The people said Altman was traveling to the Middle East to raise money for the project, codenamed Tigris. The chief executive of OpenAI plans to create an AI-focused chip company that can produce semiconductors that can compete with Nvidia, which currently dominates the market for artificial intelligence tasks. Altman’s chip venture is not yet formed and talks with investors are in the early stages, said the people, who spoke on condition of anonymity because the discussions were private.

Altman is also looking to raise funding for an AI-focused hardware device he is developing with former Apple design chief Jony Ive. Altman has talked with SoftBank Group, Saudi Arabia’s Public Investment Fund, Mubadala Investment Co. and others about these ventures, the people said, as he has sought tens of billions of dollars for these new companies.

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

Altman’s fundraising efforts come at a critical moment for AI startups. OpenAI is 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 others had hoped to be part of the deal, but were put on a waiting list for a similar deal at a later date, one of the people said. In the interim, Altman urged investors to consider his new ventures, the two people said.

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

OpenAI said Friday that Altman was removed from his role after an internal review found “he was not consistently forthright in his communications with the board.” According to a person familiar with the matter, the board and Altman had differences over AI safety, the pace of development of the technology and the commercialization of the company. Altman’s ambitions and side ventures added complexity to an already strained relationship with the board.

In a memo to employees, OpenAI’s chief operating officer, Brad Lightcap, said: “We can say with certainty that the board’s decision was not made in bad faith or without anything related to our financial, business, security, or security/privacy practices. There was no response. It was a failure in communication between SAM and the board.

OpenAI’s board is currently under pressure from investors to reinstate Altman, with one possibility being the board resigning. However, even if Altman returns, he may still need to navigate his additional ventures with the consent of OpenAI’s board.

Altman’s pitch was for a startup that would aim to manufacture tensor processing units, or TPUs – semiconductors that are designed to handle high volumes of specialized AI workloads. The goal is to provide low-cost competition to incumbent Nvidia in the market and, according to people familiar, to help OpenAI by reducing the ongoing costs of running its own services like ChatGPT and Dell-E.

Custom-designed chips like TPU are seen as having the potential to one day outperform AI accelerators made by Nvidia – which are coveted by artificial intelligence companies – but the development timeline is long and complex.

Attracting investors abroad could raise concerns from US regulators. “If foreign investments are passive – for example, do not come with board seats – and remain below 10%, they are less likely to face scrutiny,” said Philip Ludvigsen, a former US Treasury Department official. “This is often the case in sensitive industries like artificial intelligence and chip manufacturing.”

Ludvigsen, now a lawyer at King & Spalding, said the U.S. government “has historically focused more on China than the Middle East.”

A number of major venture firms, including some existing investors in OpenAI, are also willing to support any new ventures by Altman, people familiar said. Microsoft, OpenAI’s biggest investor, is also interested in supporting Altman’s chips venture, according to people familiar. Microsoft declined to comment.

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