Foxconn and OpenAI announced a collaboration on AI infrastructure hardware design and US manufacturing, though the initial agreement includes no purchase commitments or financial obligations. The Taiwanese electronics giant will co-design data center racks and manufacture components including cabling, networking, and power systems at American facilities, while OpenAI receives early evaluation access and purchase options.
The partnership arrives as OpenAI pursues roughly $1.4 trillion in infrastructure commitments over eight years, raising questions about whether the startup’s projected revenues can justify such spending. Financial documents show OpenAI expects to lose $74 billion in operating costs by 2028 before turning profitable.
For Foxconn, which posted NT$6.86 trillion ($212 billion) in revenue last year, the arrangement offers potential entry into OpenAI’s supply chain without binding obligations. The manufacturer’s server business recently became its largest revenue driver, benefiting from AI hardware demand.
Yet Foxconn previously promised Wisconsin a $10 billion factory with 13,000 jobs in 2017, only to scale back to $672 million and 1,454 positions. State and local governments spent over $1.2 billion on infrastructure for that project, which never materialized as planned.
OpenAI’s Sam Altman characterized AI infrastructure as an opportunity to reindustrialize America, though the ChatGPT maker faces scrutiny over whether its massive capital commitments will generate sufficient returns.
