Taiwan's Foxconn expands AI push with OpenAI deal
Foxconn has seen profits soar as it shifts focus from low-margin iPhone assembly to artificial intelligence servers that are now in huge demand as firms plough hundreds of billions of dollars into the technology.
Optimism over AI has sent tech company valuations sky-high -- leading to fears of a bubble and fuelling recent stock market volatility.
"Demand for critical components in AI infrastructure is already far outpacing supply, and we expect that will only continue," OpenAI head Sam Altman said Friday by video link at a Foxconn event in Taipei.
The companies will collaborate on hardware to be manufactured at Foxconn's US facilities.
"While this initial agreement does not include purchase commitments or financial obligations, OpenAI will have early access to evaluate these systems and an option to purchase them," an OpenAI statement said.
By some estimates, OpenAI has signed approximately $1 trillion worth of infrastructure deals in 2025, including a $300 billion Oracle deal and a $500 billion Stargate project with Oracle and Japan's SoftBank.
Foxconn and Intrinsic, a subsidiary of Google's parent Alphabet, also announced Friday a deal to develop and deploy "intelligent robotics solutions across Foxconn facilities in the US". No headline figure was given.
Foxconn, also known as Hon Hai, is the world's biggest contract electronics manufacturer but is branching out into electric vehicles as well as AI.
Bloomberg Intelligence analyst Steven Tseng said the Taiwanese company has been expanding capacity in the United States as a major supplier of AI servers and related networking gear.
A formal partnership with OpenAI is "a strong validation that Foxconn is now firmly among the leaders in AI infrastructure build-out", he told AFP.
The risk of a potential invasion of democratic Taiwan by China means many AI server companies prefer production in the United States, despite higher costs, Tseng said.
"Still, Hon Hai's shipment scale, vertical integration, and experience in server business should help it manage the margin impact effectively."
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