Artificial intelligence, like human intelligence, depends upon both software and hardware. Certain types of advanced semiconductors are essential to power modern AI. By far the most important and widespread of these are Nvidia’s GPUs; players like AMD, Intel and a handful of younger AI chip upstarts are also seeking to enter the market.

Nearly all of these AI chips are designed in the United States. And nearly all of them are manufactured in Taiwan. One company—the Taiwan Semiconductor Manufacturing Company (TSMC)—produces most of the world’s advanced chips, including Nvidia’s highly coveted GPUs.

Tensions between China and Taiwan have escalated dangerously over the past year. Many observers now believe it is likely or even inevitable that China will invade and reabsorb Taiwan sometime in the next few years.

This represents a major strategic dilemma for the United States, the technology world, and the field of AI.

In an effort to mitigate this precarious AI hardware bottleneck and reduce its reliance on Taiwan, in 2023 the U.S. government will massively incentivize and subsidize the construction of advanced chip manufacturing facilities on American soil. The CHIPS and Science Act, passed into law this summer, provides legislative impetus and budgetary resources for this.

This process is already underway. Two weeks ago, TSMC announced it would invest $40 billion to build two new chip manufacturing plants in Arizona. (President Biden visited the Arizona site in person to hail the announcement.) Importantly, the new TSMC plants—slated to begin production by 2026—will be capable of producing 3 nanometer chips, the most advanced semiconductors in the world today.

Expect to see more such commitments in 2023 as the U.S. seeks to derisk the global supply base for critical AI hardware.

If you enjoyed this market, please check out the other 9! https://manifold.markets/group/forbes-2023-ai-predictions

This market is from Rob Toews' annual AI predictions at Forbes magazine. This market will resolve based on Rob's own self-assessed score for these predictions when he publishes his retrospective on them at the end of the year.

Since Rob resolved and graded his 2022 predictions before the end of 2022, I am setting the close date ahead of the end of the year, to (try to) avoid a situation where he posts the resolutions before the market closes. In the event that his resolution post falls in 2024, my apologies in advance. If he hasn't posted resolutions at all by February 1, 2024, I will do my best to resolve them personally, and set N/A for any questions that I can't determine with outside source data.

-----

Edit 2023-07-05: Last year Rob used "Right-ish" to grade some of his predictions. In cases of a similar "Right-ish" (or "Wrong-ish") answer this year, I will resolve to 75% PROB or 25% PROB, respectively. This will apply for similar language too ("mostly right", "partial credit", "in the right direction"). If he says something like "hard to say" or "some right, some wrong", or anything else that feels like a cop-out or 50% answer, I will just call that N/A.

Thanks to Henri Thunberg from this comment in requesting clarification!