OpenAI partner Foxconn plans multibillion-dollar US AI push

Hon Hai Precision Industry Co. aims to spend an initial $1 billion to $5 billion growing its US manufacturing footprint, propelling an expansion aimed at sating the enormous needs of AI sector leaders Nvidia Corp. and OpenAI.

Also known as Foxconn, the Taiwanese company on Friday (November 21) unveiled a partnership with OpenAI on server design and production. The two will work closely 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.

"For OpenAI, they’re the largest user of AI compute and they have a lot of experience with what can go wrong," Liu said on Friday. "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. We share the same feeling, same understanding."

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The two companies will co-design server racks with a focus on making sure they can be manufactured across the US. Foxconn also plans to produce cabling, power systems and other key equipment for data center facilities in the country. Foxconn’s expansion of server production capacity is focused on the US, and Liu expects the company to be able to assemble up to 2,000 racks per week in 2026.

No purchase agreements were detailed as part of the OpenAI tie-up, but Liu said the two companies have already collaborated extensively and he’s hosted OpenAI Chief Executive Officer Sam Altman in Foxconn’s Taiwan offices. "We had a long talk about the problems that they’re facing and what we are seeing with the AI data center today," Liu said.

Foxconn has designs on growing its leadership and market share in the AI hardware ecosystem, in part to reduce its longstanding reliance on assembling iPhones for Apple Inc. The Taiwanese company is already a partner in OpenAI and Oracle Corp.’s Stargate project, by operating a server production site owned by SoftBank Group Corp.

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OpenAI has spent much of this year working with Oracle and SoftBank on an ambitious initiative to invest $500 billion in US data centers and AI infrastructure over the next few years — a move announced in the early days after President Donald Trump returned to the White House. Foxconn has been expanding its own AI server production in the US, meeting a key demand of the administration and helping mitigate tariff risks.

On Friday, the Taiwanese company separately announced a new electric vehicle called Model A, which will be manufactured in Japan, and a venture with Intrinsic to explore smart factories enhanced by robotics. Alongside the boom in AI investments, robotics have risen in prominence, especially in the industrial and business setting, where Nvidia Corp. CEO Jensen Huang has said he sees a trillion-dollar opportunity.

"In the factory, most of the jobs are done by the level-one automation equipment,” Liu said about simple, low-intelligence machinery. He sees humanoid robots and more advanced technology completing humanlike tasks and filling in the last 10% to 20% of work that still requires human dexterity and thought. "I don’t see too much of a challenge for us to move over there, because most of our production lines are very highly automated already, with robotics only addressing the rest of the 20%."

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