Taiwan has competitive edge in potentially polarizing AI world: Tech head

Taipei, Sept. 27 (CNA) In the artificial intelligence (AI) era, enterprises and countries already at the top might get stronger, but "Taiwan still has plenty of advantage with its excellence in hardware manufacturing," a tech company head told a forum in Taipei Friday.

AI will be immersed in people's daily life as the internet has become in the past 30 years, said Pegatron Co. Chairman Tung Tzu-hsien (童子賢) at the 2024 Taiwan AI Academy Annual Conference.

"But different from the internet age, which saw disruption [in terms of market share] in the tech industry, AI would likely only make those who are already strong stronger, be they enterprises or countries," he stressed.

Tung said the reason is that the development of AI requires massive amounts of electricity and computing power.

"Educational institutions, enterprises, or nations without the needed funding simply lose their initiative," he noted.

For example, developing a large language model such as Open AI's GPT-4 requires US$78 million for its training, and Google's Gemini Ultra US$190 million, Tung said.

The huge use of computational power and electricity has seen Open AI's Sam Altman invest in nuclear companies and Microsoft strike a deal to restart a reactor at the Three Mile Island plant in Pennsylvania, said Tung, who has advocated retaining nuclear power in Taiwan.

The cost of the needed computational power for AI infrastructure, which has to be bolstered by a sufficient supply of energy and highly advanced chips, is extraordinarily high.

"So even Apple Inc. has decided to withdraw from developing AI infrastructure in the past few months and redirected its strategy to partner with OpenAI and integrate ChatGPT into the operating systems for its devices," Tung pointed out.

"This also tells us that as long as you have a strong grip on the market and the platform, you might not necessarily be the underdog in the AI-dominant world," the chairman said.

For Tung, Taiwan's semiconductor and hardware manufacturing sectors are likewise in an advantageous position.

As AI will be used widely in all kinds of applications and industries, Taiwan is expected to not only gain in cloud equipment but also edge devices such as personal computers and phones, which will all be transformed to support AI operations, Tung said.

"The overall output value of Taiwan's semiconductor industry is expected to hit NT$5.3 trillion (US$167.2 billion) this year, which is even higher than the NT$4.8 trillion estimated at the end of 2023" that was said to be a new high, the chairman stressed, attributing the growth to the AI boom.

He wryly noted that when Open AI was founded in 2015, the average age of the three founders was 29, "but what they have created would not have been possible without the chips made by Taiwan Semiconductor Manufacturing Co. founded by the now 92-year-old Morris Chang (張忠謀)."

The same applies to electric vehicles, Tung said.

"Taiwan actually lags behind in the use of EVs, with the adoption percentage lower than 10 percent, but as Taiwan has been strong in making electronic parts and components, it will still be a good partner with the world's main vehicle brands," he added.