Altman’s $7 Trillion Ask: Why and What does it mean for GenAI?

AIAI Special Report

A mind-numbing $7 Trillion investment ask is rich – even by typical Wall Street standards. It is greater than the GDP of Germany, of Japan, and of India. Why is it that Elon Musk who wants to start an OpenAI competitor firm is only seeking $6 Billion, thousand times less than what Altman is asking for? We will explain all that in this report.

In this investigative report, we would like to breakdown what we believe Altman’s real strategy is. We have no direct knowledge of Altman’s plan. We are simply connecting the dots based upon the information we can gather from our research.

Later on, we plan to invite Altman to discuss and validate our findings.

We believe Altman’s strategy has the following four components:

  • Geopolitically Oriented
  • Value Chain Centricity
  • Demand Aligned
  • Decoupling Driven

Let’s delve right into it.


Recently OpenAI’s CEO Sam Altman indicated plans to raise $7 Trillion for chips manufacturing – and ask so big that Business Insider reported that it put Jensen Huang, CEO of NVIDIA, in a state of shock and he said that $7 trillion can buy “apparently all the GPUs.”

It all started when The Wall Street Journal (WSJ) reported that Altman was seeking to raise $5 to 7 Trillion to increase the world’s supply of semiconductors. This, WSJ said, was being done to alleviate the global chip shortage. WSJ reported that the global sales of chips were $527 billion in 2023 and are expected to rise to $1 Trillion by 2030.

Huang took note of the large amount and gave technical and business reasons why this does not make sense. His reasoning centered around how technological progress and the resultant computer processing speed enhancement will reduce the need for this type of investment.

Huang’s point makes sense if you look at it only from the “business of semiconductor” or the semiconductor industry perspective. But the issue, as we show below, is far more complicated.

Huang is right in terms of that semiconductor supply and demand conditions are always in flux. This is not the first time we have seem supply and demand forces impacting the industry in a profound way. Supply shortages and surpluses have been a constant feature of this industry.

If so then why the $7 Trillion investment? We believe that not only Sam Altman’s math and vision are consistent with what is transpiring in the world, but also that $7 Trillion is not as crazy as it sounds, if the scope of what Altman could be trying to accomplish.

To do that, we would have to escape the realm of industry specific tactical insights. We would need to look at a much broader strategic framework.

Geopolitical Realignment

Recently, Abu Dhabi artificial intelligence group G42 divested from its stakes in Chinese companies. The fund 42XFund, the technology arm of G42, declared that it has no longer any investment in China. This was a political decision and their CEO Peng Xiao acknowledged it as such. That was a move that indicated a firm resolve by the firm to move to the U.S. led geopolitical grouping.

It also indicated a line of demarcation forming where companies, investments, and industries will be separated by their geopolitical affiliations. This is nowhere more evident than in the semiconductor industry.

Altman understands that the future of AI is GenAI and the future of GenAI is dependent upon the semiconductor industry. But he is also acutely aware of the limited choices that the U.S. has and its dependency upon Taiwan. Taiwan, a nation with the most advanced semiconductor production capabilities, is at the center of the most critical geopolitical conflict at the moment. China claims Taiwan as part of China and wants to “reintegrate”. Taiwan resists that and the U.S. is siding with Taiwan.

The above increases risk in the semiconductor industry tremendously as Chinese calculus for their next actions for Taiwan will take into account their political rivalry with the United States. Thus, China can make the next geopolitical move only to obstruct the U.S. access to semiconductors.

That is not only a huge risk for GenAI but also for the United States.

To counter that risk, the semiconductor industry needs to be viewed not only from the industry specific factors but also from a geopolitical perspective.

Value Chain Centricity

A major barrier to AI adoption will be the high costs of data processing. Companies and individuals fail to adopt AI because in many cases it is cost prohibitive. What increases costs for AI are the value chain costs. If Altman is thinking he knows that focusing on only one aspect of the semiconductor – that is chip design and manufacturing – will not solve the problem.

Semiconductor needs to be viewed as a value chain.

Separately, Altman has made comments about using nuclear energy as the primary mode of clean energy. He, as well as Bill Gates, are investing in start-ups that develop small modular reactors. In a voice clip, Altman called nuclear technology “cheap, clean, safe energy” and a “wonderful thing”.

One critical part of semiconductor manufacturing is energy. A $7 Trillion investment can fund several nuclear power plants and make semiconductor manufacturing free of unclean energy dependence.

Semiconductor value chain also includes equipment manufacturers. Currently, only one firm ASML Holding N.V. (commonly shortened to ASML, originally standing for Advanced Semiconductor Materials Lithography), a Dutch multinational corporation, manufactures the most sophisticated photolithography machines used to produce computer chips.

Altman probably wants to eliminate that dependence. This means U.S. based capacity to produce photolithography machines.

Demand Aligned, Decoupling Based

The geopolitical realities of our times also force us to focus not only on the demand side of semiconductors but more importantly on what drives demand for GenAI.

Clearly, pushing adoption of GenAI will be a big challenge. Just because we have GenAI does not mean it will be used to increase productivity in the most efficient way. Altman’s strategy, in our opinion, includes linking the deployment of AI with practical AI applications in both industrial and consumer sectors.

This also means another important thing. Decoupling from the Chinese economy may become important. That is if things develop where hostilities break out between the two global powers or the competition becomes too tough and intense that any type of cooperation is replaced by cold and cut throat competition. In that scenario, decoupling from China will be inevitable.

To make that happen, redesigning the AI value chain and integrating that with GenAI will be critical. That could be part of Altman’s vision.

Add to the above the risk that recent reports show that China has already mastered 5nm chips. Their rapid pace of development was both unexpected and alarming.

Allies and Relationships

Semiconductor industry is global and it extends to many allies. Creating a counter China value chain will necessarily require working with the allies.

For example, a British company known as Arm Holdings may get some of the money that Altman is raising. Similarly, UAE and other countries may want a piece of the pie. It is likely Altman has already created a plan for building a network of capabilities that not only helps various economies but also tie them to an unbreakable bond with the United States.


A $7 Trillion raise cannot be just about building a few manufacturing plants for semiconductors. Huang, CEO of NVIDIA, is right about that.

It is about rebuilding the entire value chain of GenAI – of which semiconductors are a part of the greater vision. When all of those factors are taken into account, it becomes clear why Altman is raising money that’s more than the GDP of all countries in the world except two. In some ways he’s rebuilding the entire world.



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