TLDR
- Foxconn and OpenAI formed a partnership to manufacture AI infrastructure hardware at US facilities
- The Taiwan-based electronics giant will invest $1 billion to $5 billion in American manufacturing expansion
- Production targets include 2,000 AI server racks per week by 2026 at US locations
- The deal focuses on co-designing data center equipment including servers, cooling systems, and power infrastructure
- No purchase commitments exist yet but OpenAI gets early access to evaluate new hardware systems
Hon Hai Precision Industry, better known as Foxconn, revealed a manufacturing partnership with OpenAI on Friday. The collaboration will focus on producing AI data center hardware across American facilities.
The iPhone assembler plans to spend between $1 billion and $5 billion expanding its US operations. This investment will support manufacturing of servers, power systems, cooling equipment, and networking components for AI facilities.
Foxconn Chairman Young Liu told Bloomberg Television that both companies recognized the need for better data center designs. He explained that OpenAI’s position as the largest AI computing user gave them extensive experience with equipment failures.
Problems can occur with IT systems, power infrastructure, or cooling technology during the critical first months of operation. Liu said this shared understanding drove the partnership forward.
Server Production and Design Collaboration
The two companies will co-design server racks optimized for manufacturing across multiple US locations. Foxconn expects to reach production capacity of 2,000 racks weekly by 2026.
The partnership includes no purchase agreements or financial commitments at this time. OpenAI will receive early access to assess new systems and holds an option to purchase them.
OpenAI CEO Sam Altman described AI infrastructure as a generational opportunity to rebuild American manufacturing. He stated the partnership helps ensure AI technologies are produced domestically.
Liu disclosed he previously hosted Altman at Foxconn’s Taiwan headquarters. The executives discussed challenges OpenAI encounters with current data center operations.
Manufacturing Expansion Details
Foxconn will produce essential data center components at US facilities including cabling systems, networking hardware, cooling solutions, and power equipment. The company aims to increase sourcing from American suppliers.
The partnership will expand localized testing and assembly operations. Foxconn wants to make server rack architecture suitable for broader US manufacturing capabilities.
The Taiwanese manufacturer already participates in OpenAI’s Stargate project with Oracle and SoftBank. Foxconn operates a server production site owned by SoftBank Group for that initiative.
OpenAI has worked with Oracle and SoftBank in 2025 on plans to invest $500 billion in American data centers and AI infrastructure. The announcement came shortly after President Trump’s return to office.
Foxconn has expanded US AI server production to meet administration requirements and avoid tariff exposure. The company seeks to reduce its heavy dependence on iPhone assembly for Apple.
Foxconn also announced a separate joint venture with Intrinsic on Friday to develop smart factory solutions. The collaboration targets electronics assembly for server trays, graphics processing units, and data center equipment.
Liu explained that humanoid robots and advanced automation could eventually handle the remaining 10% to 20% of factory tasks requiring human dexterity. Most Foxconn production lines already use high levels of automation.
The company’s board approved a $1.37 billion investment in October 2025 for AI compute cluster and supercomputing center equipment purchases.
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