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OpenAI CEO Sam Altman is seeking up to $7 trillion from foreign governments and investors to bolster infrastructure for the semiconductor and artificial intelligence sectors, as reported by The Wall Street Journal. This initiative aims to support Altman's ambitious plans for these industries, which could have significant implications for commercial real estate. The expansion necessitates additional chip foundries, office spaces, and data centers.

Altman is actively fostering relationships between chip producers, investors, and OpenAI to facilitate the establishment of new chip foundries, with OpenAI committing to being a regular customer. Altman's recent tour of chip manufacturing plants in South Korea and discussions with the United Arab Emirates government reflect efforts to raise funds and boost chip production.

The growth of artificial intelligence demands substantial data storage and hardware, driving the need for increased chip production. In the United States, the data center industry, spurred by developments like the launch of ChatGPT in 2022, has expanded significantly. However, there remains a shortage of chips and graphic processing units, impacting companies like Nvidia.

AI-driven advancements have also influenced leasing activity in commercial real estate, particularly in downtown San Francisco, where OpenAI secured a significant lease in Mission Bay. The potential increase in chip production presents opportunities for industrial real estate, with foreign investors already engaging in a bidding war for parts of Nvidia's Santa Clara campus.

Original article posted on February 9, 2024