The entrance to a Foxconn construction site in Mount Pleasant, Wisconsin, in May 2019.
Katie Tarasov | CNBC
Foxconn showcased its push into artificial intelligence at its annual ‘Hon Hai Tech Day’ in Taiwan on Friday, underscoring the world’s largest contract manufacturer’s efforts to evolve beyond its role as the biggest assembler of Apple’s iPhones.
The company, officially known as Hon Hai Precision Industry Co., has also become a major player in the AI hardware space, with its event taking place the same day it announced a partnership with ChatGPT maker OpenAI.
OpenAI CEO Sam Altman, in a video statement streamed at the event, said that the two firms would “share insight into emerging hardware needs across the AI industry.”
He added that Foxconn would use those insights to design and prototype new equipment that could be manufactured in the United States.
The partnership will center on Foxconn’s server business, which earlier this year became its largest revenue driver and helped drive record profit in the September quarter.
Describing Foxconn and OpenAI as “natural partners,” Kirk Yang, an adjunct finance professor at National Taiwan University, told CNBC, “OpenAI needs strong partners, not only to manufacture products, but to quickly introduce all the products to the market.”
“So I think it makes perfect sense for OpenAI to work with Foxconn. And Foxconn is probably the strongest partner that open AI can find,” he added.
Foxconn also announced a partnership with Intrinsic, a unit of Alphabet to build so-called “artificial intelligence factories.”
The Taiwanese manufacturer highlighted deeper work with Nvidia as well, showcasing its compute trays for the chip designer’s cutting-edge Blackwell chips.
Speaking at the Friday event, Alexis Bjorlin, vice president and general manager of Nvidia’s DGX Cloud unit, said the partners would work on deploying advanced AI infrastructure much faster to meet customer demand.
AI hardware orders have surged this year, with Nvidia beating third-quarter expectations on Wednesday and providing a strong forecast for the current quarter.
Despite Nvidia’s results showing that demand for AI hardware remains strong, concerns persist in the market about a potential AI bubble and the sustainability of heavy AI spending.
Speaking to CNBC’s Emily Chan on the sidelines of Hon Hai Tech Day, Foxconn Chairman Young Liu expressed confidence that the company would be protected from a potential AI bubble.
“No matter what [AI] models or [AI] model players will win, they all need hardware, and no matter what GPU player will win, they all need system and component suppliers to support them,” he said.
— CNBC’s Emily Chan contributed to this report
