Foxconn working on a new tie-up with OpenAI, says there is no AI bubble
The two firms had earlier agreed to work together on AI hardware, such as data-centre components.
On October 30, Foxconn, the world's largest contract electronics manufacturer, announced plans for a partnership with AI developer OpenAI, though specifics remained unclear. At the company's annual event showcasing its technology, Foxconn chairman Young Liu revealed that he had met OpenAI CEO Sam Altman earlier in the day. A formal announcement on the collaboration was expected once details were confirmed.
If finalized, this deal would build upon the existing agreement between the two companies from 2025, focusing on designing and engineering AI hardware such as data-center racks and components. Notably, Foxconn, also known as Hon Hai Precision Industry and Nvidia's primary AI server provider, is increasingly reliant on AI infrastructure for its growth.
Despite recent concerns regarding the sustainability of heavy investment in the AI sector due to rising borrowing costs, Liu expressed confidence that AI is not in a bubble and anticipated continued double-digit growth for the company in 2027. With six factory buildings in Houston, Texas, dedicated to manufacturing AI servers for Nvidia, Foxconn is actively seeking further expansion.
In August, the company disclosed that its cloud and networking segment, encompassing AI servers, contributed 51% of its second-quarter revenue, marking the first time it exceeded the 50% threshold.
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