OpenAI Foxconn: AI Hardware Partnership USA
The partnership between OpenAI and Foxconn marks a strategic step in building AI infrastructure. It aims to address the hardware bottleneck for AI applications and establish the manufacturing of critical components in the USA.
Source: Own representation
OpenAI & Foxconn Partnership
OpenAI and Foxconn have announced a cooperation as part of 'Hon Hai Tech Day 2025'. The goal is the joint design and manufacturing of several generations of AI data center racks and related infrastructure in the USA. This collaboration aims to solve the AI hardware bottleneck, which limits AI growth more than software. The agreement includes the co-design of complete rack systems, including power supply, cooling, networking, and cabling, optimized for high-performance AI workloads. The manufacturing of these components is planned in Foxconn's US plants, including locations in Ohio and Texas, where electronics and AI servers for customers like Nvidia are already produced. The agreement currently includes no purchase or financing commitments from OpenAI, but grants 'Early Access' for testing and options for later purchase. This allows OpenAI access to customized hardware designs without having to commit to specific quantities contractually. In return, Foxconn gains insight into the compute needs of one of the largest AI players. This partnership is part of OpenAI's broader hardware strategy, which also includes the development of its own AI chips with Broadcom and participation in the „Stargate“ data center project. Sam Altman, CEO of OpenAI, aims to build around 30 gigawatts of computing power with an investment volume of approximately 1.4 trillion US dollars.
AI Data Center Infrastructure
The lack of computing power is a central problem in the AI industry. Nvidia speaks of ' AI factories“ – data centers that produce intelligence on an industrial scale and require pre-designed rack layouts, network topologies, and a complete software stack. Foxconn is already a major player in this area, manufacturing a large portion of the AI racks distributed by Nvidia. The company has increased its capacity to around 1,000 AI racks per week, with further increases expected from 2026. In parallel, a joint supercomputing cluster by Foxconn and Nvidia worth around 1.4 billion US dollars is being built in Taiwan, equipped with Nvidia's Blackwell GPUs and a power of 27 megawatts, operated by Foxconn's new unit Visonbay.ai. The joint development of the next generation of AI data center infrastructure in the USA by OpenAI and Foxconn focuses on systems from the mechanical rack layout to power rails, liquid cooling, and high-speed cabling. For OpenAI, this is strategically important to influence design decisions, particularly regarding cooling concepts, ASIC layouts, or the integration of its own accelerators like the planned Broadcom chips. For Foxconn, the partnership offers the opportunity to evolve from its image as a pure 'iPhone assembler' to a full-fledged AI infrastructure partner, including its own cloud and supercomputing units like Visonbay.ai.
Source: handelsblatt.com
Modern AI data centers require highly complex and energy-efficient infrastructure to handle the enormous computing demands of AI models.
Geopolitical Aspects
The focus of the OpenAI-Foxconn hardware partnership on the USA must be understood in a geopolitical context. The CHIPS and Science Act of the US government from 2022 created billions in subsidies and tax incentives to bring semiconductor production and related key technologies back to the country. At the same time, export controls and licensing regimes for high-performance AI chips were massively tightened, primarily to cut off China from access to state-of-the-art GPUs and AI accelerators. Current deals, such as the sale of 260,000 Nvidia Blackwell chips to South Korea under national security conditions, highlight the political importance of AI hardware. Against this background, it is strategically sensible for OpenAI and Foxconn to locate the manufacturing of critical components of AI data center infrastructure – racks, power supply, cooling, and networking – in US plants to strengthen supply chains within the USA. This partnership is closely linked to projects such as Stargate , an AI infrastructure joint venture by OpenAI, SoftBank, Oracle, and other partners, planned to be up to 500 billion US dollars, which is to build massive data center clusters in the USA. Initial construction sites in Texas are already visible, and Sam Altman regularly shares videos of the emerging data center complex in Abilene. The relocation of manufacturing steps from Asia to the USA and the utilization of Foxconn's experience with AI racks and cooling technologies are intended to ensure the robustness and geopolitical resilience of hardware supply chains.
Source: zdfheute.de
Sam Altman, CEO of OpenAI, is driving the strategic development and global expansion of the company, including important partnerships to strengthen AI infrastructure.
Nvidia & AI Factories
Nvidia increasingly describes modern AI data centers as ' „AI factories“ ', where data and energy are converted into models and decisions. Since 2023, Nvidia has been pursuing the goal with Foxconn of building such AI factories worldwide, including specialized data centers for autonomous vehicles, smart manufacturing platforms, and other high-load AI applications. Foxconn has translated this vision into a concrete roadmap and presents AI factories, digital twins, and autonomous robotics as the core of the future Foxconn platform at trade shows like Computex 2025. Furthermore, Foxconn and Nvidia are working on an 800-volt DC power design optimized for the next generation of AI factories to increase efficiency and packing density in data centers. In Nvidia's communication, AI factories are described as a central infrastructure building block for the coming decades, including pre-designed rack layouts and complete reference architectures for gigawatt data centers. Foxconn is not only a customer but also a manufacturing partner for Nvidia. AI servers and Blackwell systems for the US market are to be produced on a large scale in US plants operated by Foxconn and other contract manufacturers to reduce supply chain risks. YouTube formats like factory documentaries about Foxconn-Nvidia factories or clips about Nvidia's AI factory concept illustrate the physical dimension of these concepts.
Source: YouTube
Future of the AI Industry
The OpenAI-Foxconn partnership is more than a supplier deal; it is a building block of a larger upheaval. AI computing power is developing into critical infrastructure, and the question of where racks, power rails, cooling systems, and networks are manufactured is becoming a decision of industrial and security policy. OpenAI strives to reduce dependence on pure software and gain more control along the entire hardware value chain. This ranges from its own accelerators, AI factory reference designs, to racks jointly developed with Foxconn. Foxconn is positioning itself as a central producer of these new 'AI factories', with enormous economies of scale in AI racks, a growing network of supercomputing centers, and close ties to Nvidia, OpenAI, and other hyperscalers. The success of this strategy will be measured by how quickly and reliably new AI data centers can be built and operated in the USA and whether the promised robustness of AI hardware supply chains proves itself in practice. Whoever controls the physical AI infrastructure determines the framework within which AI models are created, trained, and deployed. This is the core of the cooperation between OpenAI and Foxconn.
Source: invezz.com
Specialized AI chips are the heart of modern AI systems and are crucial for the performance of data centers and 'AI Factories'.