Foxconn working on a new tie-up with OpenAI, says there is no AI bubble

The potential collaboration suggests Foxconn's strategic emphasis on artificial intelligence infrastructure. The company, already identified as Nvidia's largest AI server maker, is increasingly focusing on the specialized hardware needed for AI applications, such as data-center racks and components. This new direction builds on an existing agreement with OpenAI for similar hardware development.

This strategic shift is reflected in Foxconn's financial performance. Its cloud and networking products segment, which encompasses AI servers, recently accounted for 51 percent of its second-quarter revenue. This marks the first time this segment has exceeded half of the company's total revenue, indicating the growing importance of AI hardware manufacturing to its business.

Despite broader market concerns about the sustainability of heavy investment in the AI sector, Foxconn's Chairman Young Liu stated the industry is not in a bubble. He anticipates the company will maintain double-digit growth next year, driven by its reliance on AI infrastructure. Foxconn currently operates six factory buildings in Houston, Texas, dedicated to manufacturing AI servers for Nvidia, and foresees further expansion needs.