SAN JOSE, California — Two tech CEOs pushing to produce more of the advanced chips needed for artificial intelligence met for a brainstorming session Wednesday, as the booming market’s early leader reported another quarter of eye-popping growth.
The onstage conversation between Intel CEO Pat Gelsinger and OpenAI CEO Sam Altman took place at a convention center in San Jose, California, a few hours after Nvidia announced that revenue for the November-January period nearly quadrupled from the previous year.
Intel, a Silicon Valley pioneer that has struggled in recent years, laid out its plans to overtake Nvidia during a daylong conference. Gelsinger kicked things off with an opening statement outlining how he envisions the feverish demand for AI-equipped chips that his company will reinvigorate in a wave he dubbed the “Siliconomy.”
“It’s just magical how these little chips enable the modern economic cycle we’re in today,” Gelsinger says.
OpenAI, a Microsoft-backed San Francisco startup, has become one of technology’s brightest stars since launching its most popular AI innovation, ChatGPT, in late 2022. Altman is now keen to go even further and compete with Google and others companies such as Anthropic and flexion AI. But the next leaps he wants to make will require much more computing power than what is currently available.
The imbalance between supply and the voracious appetite for AI chips explains why Altman is keenly interested in securing more money to help expand the industry’s production capacity. During his conversation with Gelsinger, he sidestepped questions about whether he is trying to raise $7 trillion – more than the combined market value of Microsoft and Apple – as recently reported by The Wall Street Journal.
“The core truth is that we think the world is going to need a lot more (chips for) AI computing,” Altman said. “That will require a global investment in many things that go beyond what we think about. We are not yet at a place where we have numbers.”
Altman emphasized the importance of accelerating the AI momentum of the past year to advance a technology that he claims will lead to a better future for humanity, though he acknowledged there will be downsides along the way.
“We are moving to a world where more content will be generated by AI than content generated by humans,” Altman said. “Not only will this be a good story, but it will be a net good story.”
Perhaps no company is now benefiting more from the AI gold rush than Nvidia. The 31-year-old chipmaker has been catapulted to the technological forefront because of its lead in creating the graphics processing units, or GPUs, needed to power popular AI products like ChatGPT and Google’s Gemini chatbot.
Over the past year, Nvidia has experienced staggering growth, creating more than $1.3 trillion in shareholder wealth in less than 14 months. That has made it the fifth most valuable U.S. publicly traded company, behind only Microsoft, Apple, Amazon and Google’s parent company, Alphabet Inc.
Intel, on the other hand, has tried to convince investors that Gelsinger has put the Santa Clara, California-based company on a comeback trail three years after he was hired as CEO.
Since his arrival, Gelsinger has already pushed the company into the business of making chips for other companies and committed $20 billion to building new factories in Ohio as part of its expansion into running so-called “foundries” for third parties .
At Wednesday’s conference, Gelsinger predicted that Intel would oversee the world’s second-largest foundry company by 2030, likely behind current leader Taiwan Semiconductor Manufacturing Co., or TMSC, largely by meeting demand for AI chips.
“There is some kind of space race going on,” Gelsinger told reporters on Wednesday after delivering the conference’s keynote speech. “The overall demand (for AI chips) appears to be insatiable in the coming years.”
Gelsinger’s efforts have so far failed to impress investors. Intel’s share price has fallen 30% under his reign, while Nvidia’s shares have risen about fivefold over the same period.
Intel is also looking to share some of the $52 billion the U.S. Commerce Department wants to distribute in an effort to boost the country’s production capacity in the $527 billion market for processors, based on last year’s global sales.
Less than $2 billion of the funds available under the CHIPs and Science Act of 2022 have been allocated so far, but Commerce Secretary Gina Raimondo promised “a steady drumbeat” of announcements about more money that would be distributed.
Raimondo also told Gelsinger that from recent conversations with Altman and other executives leading the AI movement, she is struggling to process just how big the market could become.
“The amount of chips they say they need is mind-boggling,” she said.