OpenAI taps South Korea's Samsung, SK Hynix for Stargate AI chips, data centres

OpenAI will also work with Samsung and SK Hynix on building two data centres, a Korean-style Stargate, leveraging Seoul's ambition to become an AI hub in Asia.

Samsung Electronics Co. Ltd. and SK Hynix Inc. have signed letters of intent to supply chips to OpenAI Inc. 's Stargate project, underscoring their role in building large-scale AI data centres.

OpenAI is seeking to order 900,000 semiconductor wafers in 2029, and plans to collaborate with Samsung and SK Hynix to set up two data centres in South Korea with an initial capacity of 20 MW.(Representational Image/Pixabay)

OpenAI will also work with the two South Korean firms on building two data centres, a Korean-style Stargate, leveraging Seoul's ambition to become an AI hub in Asia and the country's large number of paying ChatGPT subscribers—second only to that of the United States.

The announcements were made on Wednesday after OpenAI CEO Sam Altman met South Korean President Lee Jae Myung and the chairmen of Samsung Electronics and SK Hynix at the presidential office in central Seoul.

US President Donald Trump unveiled the $500 billion Stargate project in January, charging OpenAI and partners including SoftBank Group Corp. and Oracle Corp. with ensuring the US remains a leader in artificial intelligence.

Expanding chip availability was one of the key ideas of the project, and Nvidia said last week it would invest up to $100 billion in OpenAI and supply it with data centre chips.

AI Data Centres In South Korea

“Korea has an industrial base like nowhere else in the world that is critical for the development of AI,” Altman said. “And so to get to work with such wonderful partners, Samsung and Hynix in many, many ways, but really starting with memory and the needs for that to serve the whole world's demand for AI.”

The presidential office said Google has been in talks with two to three South Korean companies on AI partnership, while SK Group in June announced a 7 trillion won investment, including $4 billion from Amazon Web Services, Amazon.com Inc.'s cloud service provider, to build a data centre in South Korea.

Samsung and SK Hynix together hold about 70% of the global Dynamic Random Access Memory chip market and nearly 80% of the HBM market.

HBM — a type of DRAM standard first produced in 2013 — involves stacking chips vertically to save space and reduce power consumption, helping to process the large volumes of data generated by complex AI applications.

Analysts estimated that 900,000 wafers of advanced DRAM chips would be worth more than 100 trillion won ($70 billion) though the figure could vary with memory market cycles.

OpenAI this year set up its first office in Seoul as South Korean demand for its ChatGPT service surged.

Despite widespread expectations that AI will fundamentally change the world, investors have voiced substantial concern about a potential bubble from building too quickly.

The Stargate project has been delayed by longer-than-expected negotiations with other parties and decisions over sites, SoftBank's CFO said in August.

Alongside the chip supply agreements, Samsung affiliate Samsung SDS signed a partnership with OpenAI to develop, build and operate AI data centers under the Stargate project, while also expanding enterprise AI services.

Shipbuilder Samsung Heavy Industries and construction unit Samsung C&T will jointly work with OpenAI to develop floating offshore data centres to cut cooling costs and carbon emissions.