OpenAI’s Stargate project taps Samsung, SK Hynix for chip supply

Samsung Electronics (005930.KS) and SK Hynix (000660.KS) have signed letters of intent to supply memory chips for OpenAI's data centres, as South Korean chipmakers join forces with the ChatGPT maker to meet rising demand from its Stargate project.

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.

U.S. President Donald Trump unveiled the $500 billion Stargate project in January, charging OpenAI and partners including SoftBank (9434.T) and Oracle (ORCL.N) with ensuring the U.S. remains a leader in artificial intelligence.

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

Plan to build two data centres in South Korea

South Korea's top presidential adviser, Kim Yong-beom, said OpenAI was seeking to order 900,000 semiconductor wafers in 2029, and planned to set up joint ventures with Samsung and SK Hynix to build two data centres in South Korea with an initial capacity of 20 megawatts.

The adviser said South Korea was open to participating in financing for the Stargate project if needed.

“The significant part of the Stargate project would be impossible without memory chips from the two companies,” Kim said in a press briefing.

The president's office said the partnership would give South Korean chipmakers an early foothold in the world's largest AI infrastructure project, providing a growth opportunity for the domestic chip industry.

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.

This year, OpenAI set up its first office in Seoul as South Korean demand for its ChatGPT service surged. The country has the largest number of paying ChatGPT subscribers after the United States, according to OpenAI.

Alongside the chip supply agreements, Samsung Electronics' affiliate Samsung SDS (018260.KS) signed a partnership with OpenAI to develop, build and operate AI data centres under the Stargate project, while also expanding enterprise AI services.

Shipbuilder Samsung Heavy Industries (010140.KS) and construction unit Samsung C&T (028260.KS) will jointly work with OpenAI to develop floating offshore data centres to cut cooling costs and carbon emissions.