Foxconn To Pour Up To $5B Into US Plants After Striking Servers Deal With OpenAI

• Foxconn and OpenAI announced a broad partnership to co-design and manufacture servers and other data center hardware in the U.S.
• Separately, Foxconn has committed to invest an initial $5 billion towards expanding its manufacturing capacity in the country.
• OpenAI CEO Sam Altman noted the deal’s importance for the U.S., calling AI infrastructure a “generational opportunity to reindustrialize America.”

Hon Hai Precision Industry Co., also known as Foxconn, said on Friday it would spend an initial $1 billion to $5 billion to expand its manufacturing operations in the United States, a move aimed at serving the server manufacturing needs of Nvidia and OpenAI.

Hours earlier, Foxconn and OpenAI announced a broad partnership to co-design and manufacture servers and other data center hardware in the U.S. Financial terms were not disclosed.

Foxconn has factories in Wisconsin, Ohio, Texas, Virginia, and Indiana, according to its website.

What Does It Mean?

The moves are seen as the Taiwanese company’s bid to expand into the lucrative data center space, partly to reduce its reliance on assembling iPhones for Apple, Bloomberg reported.

The partnership is only the latest for OpenAI, which in recent months has struck multiple multibillion-dollar deals with cloud computing providers and chipmakers, such as Nvidia, Broadcom, and Advanced Micro Devices, to set up data centers. 

Foxconn and OpenAI will work together to resolve the particular pain points of getting artificial intelligence data centers up and running over the key first few months of operation, Foxconn Chairman Young Liu said in an interview with Bloomberg Television.

‘Generational Opportunity’ For US

“Anything can happen with the IT equipment, with the power equipment, with the cooling equipment. So because of that experience, they learned that there must be a new way or new architecture for the AI data center,” Liu said. “We share the same feeling, same understanding.”

“This partnership is a step toward ensuring the core technologies of the AI era are built here,” OpenAI CEO Sam Altman said in a statement, calling AI infrastructure a “generational opportunity to reindustrialize America.”

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