Foxconn CEO and Chairman Young Liu has indicated that the surge in corporate investment in artificial intelligence (AI) infrastructure will continue as large language models (LLMs) advance. In an interview with CNBC’s Emily Tan, Liu remarked that the AI boom “still has some time to go” due to ongoing developments in language models from companies like OpenAI.
Liu noted the industry’s trajectory toward achieving Artificial General Intelligence (AGI)—a type of AI that could rival or surpass human intelligence. He explained that AI development is progressing through stages of intelligence, with the industry currently at level two out of four potential levels. “There’s still level three and level four to go,” Liu said, underscoring the potential for further advancements.
OpenAI, one of the major players in AI development, recently raised $6.6 billion at a valuation of $157 billion and is working on its next-generation language model, GPT-5, though the release date has not yet been disclosed. The company’s push toward AGI aligns with its CEO Sam Altman’s vision that AGI will emerge in the near future, albeit with less impact on job displacement than expected.
Foxconn, a major contract manufacturer for electronics, including Apple’s iPhone, has seen significant growth due to increased demand for AI servers. Liu noted that the AI server industry is expected to continue expanding as AGI capabilities grow. “With the AGI capability growing, the age [of] AI devices will be another industry we should watch carefully,” Liu stated.
Nvidia’s Blackwell Chip Fuels Growth
Foxconn’s strong performance in the September quarter, with revenues reaching 1.85 trillion Taiwanese dollars ($57.5 billion), was largely driven by AI servers. This growth exceeded company expectations by 20.2% year-over-year, supported by the company’s manufacturing contracts with global tech giants like Amazon, Google, Microsoft, and Nvidia.
Foxconn is gearing up to ship Nvidia’s Blackwell GPU, an advanced AI server chip, by the fourth quarter of 2024. Liu emphasized that demand for the Blackwell chip is far stronger than anticipated, prompting the company to build new factories in Mexico to meet demand. Nvidia CEO Jensen Huang had previously described the demand for Blackwell as “insane,” with companies such as OpenAI, Microsoft, and Meta among those vying for early access to the chip, which is expected to cost between $30,000 and $40,000 per unit.
AI Devices: The Next Growth Frontier
Liu highlighted that beyond cloud-based AI applications, Foxconn sees a new growth opportunity in “on-device” AI. This involves AI processing that occurs directly on mobile devices rather than through cloud servers. Liu noted that generative AI (genAI) devices will likely drive the next wave of growth for Foxconn.
“Currently, we’re seeing this on the cloud side. You see that genAI cloud equipment was very much booming. But in the next phase, what we’re seeing will be the Gen AI devices,” Liu stated, adding that Foxconn has high expectations for this sector.
While Apple has not yet launched its AI system, Apple Intelligence, for iPhones, the company is expected to release it in beta later this fall. The broader smartphone industry is hoping AI advancements will spark a new “supercycle” of growth, with companies such as Samsung, Google, and Honor also betting big on AI-powered devices.
Smartphone sales have shown signs of recovery this year. In the second quarter of 2024, global smartphone shipments rose by 6.5% year-over-year to 285.4 million units, according to IDC data, marking the fourth consecutive quarter of growth.
Featured Image courtesy of Bloomberg.com
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