Published by Global Banking & Finance Review®
Posted on November 20, 2025
2 min readLast updated: January 20, 2026
Add as preferred source on GoogleFoxconn and OpenAI partner to design AI hardware, focusing on data center components to meet growing infrastructure demands.
(Reuters) -Foxconn will collaborate with U.S.-based OpenAI to design and engineer data center racks, components, and other artificial intelligence hardware, the Taiwanese company said on Thursday, as both firms seek to capitalize on booming demand for AI infrastructure.
While the initial agreement does not include purchase commitments or financial obligations, OpenAI will have early access to evaluate the systems and an option to buy them, Foxconn said.
The tie-up will allow Foxconn, the world's largest contract electronics maker, an insight into the growing compute needs of large AI firms and help design products that meet the requirements of advanced large language models.
The Nvidia supplier last week offered a bullish outlook on AI-related demand, saying it would be a big driver of 2026 growth as Foxconn rides the data center boom and benefits from the billions invested by Big Tech firms.
The deal expands OpenAI's involvement in hardware design, having partnered with Broadcom to develop its own custom chip, as it seeks to take a hands-on approach to creating AI systems.
OpenAI CEO Sam Altman has said the startup is committed to spending $1.4 trillion to develop 30 gigawatts of computing resources - enough to roughly power 25 million U.S. homes.
Foxconn will manufacture the data center components, which include cables, power systems, and networking equipment at its U.S. facilities, bolstering supply chains and side-stepping any potential tariffs from the Trump administration.
Separately on Thursday, Foxconn announced a joint venture with Alphabet unit Intrinsic to establish general-purpose robotics and automation across manufacturing facilities to speed-up production.
Initially, the collaboration will cover a range of scenarios across assembly, inspection, machine tending and logistics applications.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Maju Samuel)
Artificial intelligence (AI) refers to the simulation of human intelligence in machines programmed to think and learn like humans. It encompasses various technologies, including machine learning and natural language processing.
Data center racks are physical structures used to house servers and other computing equipment in a data center. They help organize and manage hardware while optimizing space and cooling.
A partnership in business is a formal arrangement where two or more parties collaborate to manage and operate a business, sharing profits, losses, and responsibilities.
A contract manufacturer is a company that produces goods for another company under a contractual agreement. This allows businesses to outsource production while focusing on other operations.
Explore more articles in the Finance category
