Sam Altman seeks to raise up to $7T for new chip project | Hacker News Reader

Sam Altman seeks to raise up to $7T for new chip project

reuters.com

57 pointsmoose4461 comments

That's a ridiculous sum. Even if you divide it over a decade.

Global semiconductor sales are about 0.6 trillion annually. Semiconductor industry is projected to invest $0.5 trillion 2024 into chipmaking.

Gulf states are full of dumb money that can be extracted with nice Powerpoint and hype talk, but that's too much even for them.

---- edit ----

In talks with TSMC, Altman has said he wants to build dozens of chip-fabrication plants in the next few years, the people said. His vision would be to raise the money from Middle East investors and have TSMC build and run them. https://archive.is/tyZq2#selection-6231.180-6234.0

Come on. It is only a slightly above the combined value of Microsoft, Apple and Google. Many people has this kind of pocket change laying around /s

The whole arab league GDP (which is whole arab countries not only golf) is about 3.5T [1] which is a little bit over half of this amount. Too much is understatement.

[1] https://en.m.wikipedia.org/wiki/List_of_Arab_League_countrie...

Gulf states sovereign wealth funds have about $3.7T in total assets. They would have to sell 50% of the assets to get 25% share in Sam Altman's new project.

If they tried to sell all $3.7T at once - they'd be lucky to end up with $2.5T.

Maybe they just transfer them, first trillion+ barter based fundraising round?

At some point, someone usually wants cash instead of shares in Neom (usually quickly), and you need to liquidate those shares for cash, affecting the valuation of said speculative assets.

Slightly less than related, but sovereign wealth funds can pay absolutely insane amounts of money for the talent that they want. FAANG is far from the end game for truly talented developers.

What's even better, they are not good at recognizing talent. They are incompetent.

When some has reputation of being a talent, or appears to be talented catch, they throw money and perks.

Who is "they" ? Sovereign funds or faang?

any examples?

> FAANG is far from the end game for truly talented developers.

I’ve spent the last 18 months in UAE, pretty well networked into Oxford and Cambridge university alumni networks, and never heard any suggestion of this. The team behind Falcon in AD seem to pay pretty well, but not FAANG.

He's probably pricing hyperinflation into the synergy NPV calculation.

But he's not asking for future dollars, he's asking for present(ish) dollars, in microeconomics terms

Even if the gulf states had the money, they still wouldn't do it. The main thing they care about is decreasing their risk of having their assets frozen by the U.S., which is why they are happy to make money-losing investments. Whereas investing this much into a single venture would massively increase their exposure.

These people literally talk about "creating God" and "replacing humans" when they talk about this stuff.

> Feb 8 (Reuters) - OpenAI CEO Sam Altman is in talks with investors, including the UAE, to raise funds for a tech initiative to boost the world's chip-building capacity and expand its ability to power AI, among other things, the Wall Street Journal reported on Thursday. > The project could require raising as much as $5 trillion to $7 trillion, the report added, citing people familiar with the matter.

I don't know why I'm reading Reuters report WJS report someone's words. Where is the actual source of this number? Did Sam Altman really say "$7T" or it's just someone's wild guess?

Maybe he got confused by the billions / thousand millions thing, and compensated the wrong direction?

"People familiar with the matter" gave the story to the WSJ reporter, so likely people that were in some of the meetings. The WSJ story is more comprehensive:

https://archive.is/tyZq2#selection-6231.180-6234.0

7 trillion here, 7 trillion there, pretty soon we're talking about real money.

$7T sounds like a lot of money but reading between the lines seems to be the projected total cost for not just chip design and fab but also infrastructure to support such an industry over a bit of time. That seems reasonable to me. It's not like you can easily spend $7T very quickly, so this total value would likely be spent over many years across many different companies/investments in order to grow the entire AI industry. It's hardware, software, facilities, engineers, scientists, power plants, power distribution networks, silicon fabs, etc.

> this total value would likely be spent over many years across many different companies/investments in order to grow the entire AI industry.

Sure, in total across many companies, ventures and years as part of an ecosystem. But one entity raising the entire sum? That seems ludicrously unrealistic.

> $7T sounds like a lot of money but

Sorry you can stop right there.

It's effectively a Manhattan Project for fab capacity. The US spent $1.9b in 1941 dollars on the Manhattan project, which is about $400b today. On that scale, the 'trillions' number is only tenfold, which ... is still outlandish, and can't possibly be managed by a single private entity, but is order-of-magnitude-correct for "we're going to force the development of a civilizationally determinant technology by overwhelming application of capital"

Are they planning to acquihire Taiwan?

$7T is ~10x Taiwan’s GDP :)

10x revenue is a typical multiple these days.

I believe it s larger for real estate

this is insane. like, more than the market cap of nvidia, intel, and amd combined. And thats ignoring that the challenges of manufacturing are different from software

[removed]

People will "have to" because why?

Really? To me this number makes him look like adam neuman 3.0

> "The guy became a tech superstar in a few days for popularising the oracle of the 22nd century."

This reveals a lot about the people who made him a tech superstar, and very little about his actual underlying abilities.

Silicon Valley circa 2024 seems to just be one personality cult after another.

Is this an Austin Powers / Dr. Evil moment where the character doesn't know what decade they're in and how much money to ask for?

Wow inflation has really spiked

dupe: https://news.ycombinator.com/item?id=39310563

That's well beyond robot army territory (the world spends ~$2T/yr on defense)

https://www.sipri.org/media/press-release/2022/world-militar...

Also, at ~$1/installed Watt, that is about 1/3 of global energy needs (~20TW) if he just used that to install solar panels. https://atb.nrel.gov/electricity/2021/utility-scale_pv-plus-...

A lot of naysayers missing the point in this thread.

Is the most likely outcome that we shortly 10x the market for AI chips? Probably not. But, if OpenAI get AGI, or even just strong agents or expert tools, you can easily imagine the demand skyrocketing.

If you are a founder or VC, you are into low probability, high payoff bets. Think of this investment in those terms.

Let’s say Altman thinks there is a 20% chance of OpenAI getting AGI in 10 years. (Maybe you think it’s lower, I suspect he thinks it is higher) In the possible world where we do get AGI, the value that OpenAI can create will be hard-capped by chip production, so placing a complementary bet on chips means he can prevent this from limiting OpenAI’s growth in the happy case.

If this bet pays of 100x in 10% of worlds, it’s a great bet. From Altmans perspective the chip business could break even as long as it unlocks that 100x growth for OpenAI. He’s basically doubling down on his existing portfolio.

Another obvious issue in the imaginary AGI world is energy production; and indeed, Altman has big investments in nuclear too.

The first company that gets AGI will be the world's first $10T company. Work backwards from that.

(None of the above requires particularly high probabilities of actually achieving AGI to make sense as a bet.)

We must remember that microsoft will have no share in AGI.

https://cryptoslate.com/agi-is-excluded-from-ip-licenses-wit...

What would it take for that license to change? Who currently has the power to resist pressures to renegotiate that license?

Microsoft is there because Open-AI needs cheap infrastructure.

I bet that they can have the same deal with Amazon, Google, Oracle...

Not “no share”, they still get a 100x (IIRC) profit cap on their investment. A big upside.

But yes, it’s OpenAI not Microsoft that is the $10T company if Altman’s bet pays off.

AI chips will be ~5% of TSMC's revenue in 2024. A very bullish outcome would be ~8% in 2025. TSMC spends ~$50b on capex per year. This is a completely ridiculous proposal.

This is assuming no transformative effects whatsoever from AGI; in this world Altman's bet didn’t pay off.

If you think AGI is only going to increase demand for chips by a few percent, I encourage you to rethink what AGI actually entails.

To be clear though, 2025 is too early. I said 10 years.

This is a ridiculous Sam.

Either

(a) someone's source is off by a whole ,000 and the Journal ran with it

(b) OpenAI is going to assume nation-state levels debt become the most valuable and powerful company since the Dutch East India Company,

or (c) OpenAI is talking to investors and governments around the world about public-private investments in fabs, electricity generation, attendant cities, infrastructure, etc. that might require a total investment over X years and all parties involved of $N trillion dollars.

Occam says (a), but (c) seems far more likely than (b).

i think they would do b if they could, but c is more likely. they will have to hit checkpoints to guarantee revenue in order for all parties involves to continue.

Reminds me of Adam Nuemann's ambition to be the world's first trillionaire.

Scary.

Interesting sales tactic though. Just floating this absurd number out there is classic highball, perhaps will make an investment of “only” 100 billion feel more reasonable to Abu Dhabi or SoftBank.

Hubris, thy name is Sam.

[dupe]

Lots of discussion yesterday: https://news.ycombinator.com/item?id=39310563

That's more than the GDP of all countries, except China and USA.

What is he gonna go with all that money? Start his own country?

The project is code-named “Skynet”

Better to remain silent and be thought a fool, then to speak and remove all doubt, Sam.

Although I do know this is ridiculous for now, I love that we're entering the age of talking in terms of trillions for innovation and investments. Onwards to climbing the Kardashev Scale as a species!

Type 1 civilization in the next 200 years?

> the age of talking in terms of trillions for innovation and investments

Or maybe the dollar just isn't worth as much as it used to be ;-)

> Type 1 civilization in the next 200 years?

Jokes aside, yes, one can only hope.

that...or hyperinflation?

Funded by debt lol.

Too much of the magic mushrooms Sam.

"- Eh Sam, how was your day ? - Not too bad, almost raised $7T. After being fired, it's a decent achievement"

He is delusional.

ask for 7 and get 1?

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