OpenAI, the creator of ChatGPT, has partnered with Hon Hai Precision Industry Co., better known as Foxconn, to design and produce hardware crucial for data centers. This collaboration marks a strategic move by OpenAI to meet the rapidly growing demand for infrastructure supporting its advanced AI systems. As part of the agreement, Foxconn will co-design and develop next-generation data center server racks while significantly expanding its manufacturing operations across the United States. The company will also domestically produce key data center components, including cabling and power systems. Both companies have clarified that the agreement does not include specific purchase commitments.

OpenAI explained that the partnership focuses on design work and preparing US-based manufacturing for future AI infrastructure hardware. The company will provide insights into the evolving hardware needs of the AI industry, guiding Foxconn’s design and development of equipment to be built at its American facilities. This effort aligns with OpenAI’s broader strategy, which includes multibillion-dollar deals with major cloud providers and chipmakers such as Nvidia Corp. and Advanced Micro Devices Inc., aimed at expanding its data center footprint. OpenAI has also strengthened its control over its supply chain, reflected in its October agreement to acquire chips and components from Broadcom Inc. However, this accelerated spending has sparked concerns among analysts about a potential “AI bubble.”

For Foxconn, the agreement represents a significant long-term opportunity, reinforcing its ambition to deepen its involvement in the growing AI ecosystem. It also helps reduce the company’s historic reliance on assembling iPhones for Apple Inc. A direct partnership with an AI leader like OpenAI signals Foxconn’s readiness to support clients in integrating custom-designed technologies into data center infrastructure. Sam Altman, OpenAI’s Chief Executive Officer, underscored the national importance of the partnership, stating: “This partnership is a step toward ensuring the core technologies of the AI era are built here.” He added that “This work will strengthen US leadership and help ensure the benefits of AI are widely shared.”

Throughout the year, OpenAI has made significant efforts to establish major alliances for AI infrastructure development. It has worked with Oracle Corp. and SoftBank Group Corp. on an ambitious plan to invest $500 billion in US data centers and AI infrastructure over the next several years. Notably, this initiative was announced shortly after President Donald Trump returned to office, according to reports. Foxconn, already involved in the expansive “Stargate project,” is actively boosting its AI server manufacturing capabilities in the United States, aligning with the administration’s priorities and reducing potential tariff-related risks. Despite the partnership’s promising scope, the exact financial gains for Foxconn remain under evaluation. Altman has previously signaled an even larger vision, outlining OpenAI’s intention to invest an unprecedented $1.4 trillion in AI infrastructure overall.