TAIPEI – OpenAI has teamed up with Taiwan’s electronics powerhouse, Foxconn, to innovate and produce essential equipment for AI data centers across the United States. This collaboration is part of a strategic push to enhance the AI infrastructure within the country.

Foxconn, known for creating AI servers for Nvidia and assembling Apple products such as the iPhone, will join forces with OpenAI to design and develop AI data center racks. Both companies released statements on Thursday and Friday announcing this joint effort.

Under the agreement, Foxconn will manufacture various components at its U.S. facilities, including cabling, networking, and power systems for AI data centers. OpenAI is granted “early access” to these products for evaluation, with the option to make purchases.

Foxconn’s manufacturing presence in the U.S. includes plants in Ohio and Texas. This initial agreement, however, does not entail any specific financial or purchase commitments from either party.

The Taiwanese manufacturing giant is actively diversifying its business portfolio, stepping into the electric vehicle market and acquiring other tech companies to expand its range of electronic products.

“This partnership is a step toward ensuring the core technologies of the AI era are built here,” Sam Altman, CEO of San Francisco-based OpenAI, said in the statement. “We believe this work will strengthen U.S. leadership and help ensure the benefits of AI are widely shared.”

OpenAI has committed $1.4 trillion to building AI infrastructure. It recently entered into multi-billion partnerships with Nvidia and AMD to expand the extensive computing power needed to support its AI models and services. It is also partnering with US chipmaker Broadcom in designing and making its own AI chips.

But its massive spending plans have worried investors, raising questions over its ability to recoup its investments and remain profitable. Altman said this month that OpenAI, a startup founded in 2015 and maker of ChatGPT, is expected to reach more than $20 billion in annualized revenue this year, growing to “hundreds of billions by 2030.”

Foxconn’s Taiwan-listed share price has risen 25% so far this year, along with the surge in prices for many tech companies benefiting from the craze for AI.

The Taiwan company’s net profit in the July-September quarter rose 17% from a year earlier to just over 57.6 billion new Taiwan dollars ($1.8 billion), with revenue from its cloud and networking business, including AI servers, contributing the most business.

“We believe the importance of the AI ​​industry is increasing significantly,” Liu said during Foxconn’s earnings call this month.

“I am very optimistic about the development of AI ​next year, and expect our cooperation with major clients and partners to become even closer,” said Liu.

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Chan reported from Hong Kong