Foxconn and OpenAI Join Forces in a $1-5B AI Hardware Production Agreement
Apple supplier Foxconn has unveiled a significant collaboration with OpenAI to design and manufacture specialized AI data center hardware in the United States. This partnership focuses on the creation of custom server racks, cabling, power systems, and cooling gear specifically tailored for AI workloads.
Foxconn intends to invest between $1 billion and $5 billion to augment its US manufacturing footprint. The company anticipates assembling up to 2,000 AI server racks per week by 2026. This deal marks OpenAI’s ongoing efforts to lessen its reliance on traditional cloud infrastructure providers such as Microsoft and Google.
Although the partnership does not include guaranteed purchase commitments, OpenAI will have early access to evaluate the new systems and an option to purchase them. Foxconn chairman Young Liu confirmed that the company plans to initiate research and development in San Jose, California, before transitioning into production at its existing Ohio manufacturing compound.
This strategic move coincides with OpenAI’s commitment to over $1 trillion in infrastructure spending from 2025 to 2035. This transition signifies OpenAI’s transformation from a dependent AI firm to a potential competitor of tech giants. The partnership highlights the fierce competition for AI compute resources as companies vie to power the next generation of artificial intelligence applications.