Samsung, SK Hynix shares climb after chips deal with OpenAI

[SEOUL] Samsung Electronics and SK Hynix’s shares rose sharply after Korea’s largest companies forged initial agreements to supply chips to OpenAI’s Stargate project, reinforcing their lead in advanced artificial intelligence (AI) memory.

OpenAI’s Sam Altman signed a letter of intent on Wednesday (Oct 1) to enlist the two companies in the data centre construction effort, which involves the biggest players in AI from Nvidia to Oracle. Overall demand from OpenAI could reach 900,000 wafers per month as Stargate expands across the globe, the South Korean firms said.

Samsung’s stock rose as much as 4.5 per cent while SK Hynix jumped 9.7 per cent, their biggest intraday rise since April.

That projection for demand is more than double the current global capacity for HBM or high-bandwidth memory, underscoring Stargate’s enormity and quickening global AI development, the SK group said.

OpenAI and Nvidia are helping lead a global push to build data centres for a new generation of AI tools, an effort that’s expected to cost trillions of US dollars and require chips, servers, cooling systems and copious amounts of electricity. Altman was due in Taipei next, where he’s slated to meet with AI linchpins Taiwan Semiconductor Manufacturing Company and Hon Hai Precision Industry, local media reported.

The pact signed in Seoul is aimed at creating a longer-term partnership between America’s most valuable AI startup and two Asian companies that, along with Micron Technology, dominate the memory chip sphere. As part of the agreement, the partners will help Seoul develop a domestic AI ecosystem, something many governments are exploring to try and harness a potentially transformative technology.

“I hope that Samsung and SK will play a key role in the global spread of AI together with OpenAI,” Korean President Lee Jae Myung said.

Last month, Nvidia announced it will invest as much as US$100 billion in OpenAI to support new data centres and other infrastructure, a blockbuster deal that underscores booming demand for services such as ChatGPT and the computing power needed to make them run.

SK Hynix is the global leader in the provision of HBM essential to Nvidia’s AI accelerators, though Samsung is vying to become a major supplier as well.

SEE ALSO

Other Samsung group companies, including Samsung SDS, Samsung C&T and Samsung Heavy Industries, will also partner with OpenAI to explore future technologies. Those include floating data centres and collaboration in data centre design.

SK Telecom and OpenAI will jointly build a dedicated OpenAI data centre in the country’s southwest. BLOOMBERG