Foxconn Plans $1-5 Billion US Expansion, Partners with OpenAI on AI Server Design

Hon Hai Precision Industry Co., better known as Foxconn, announced plans to invest between $1 billion and $5 billion to expand its US manufacturing footprint. The move aims to meet surging demand from AI leaders such as Nvidia Corp. and OpenAI.

Partnership with OpenAI

Foxconn Chairman Young Liu said the collaboration will tackle pain points in setting up AI data centres, including IT, power and cooling systems. “For OpenAI, they’re the largest user of AI compute, and they have a lot of experience with what can go wrong,” Liu told Bloomberg Television. The companies will co-design server racks optimised for US-based manufacturing, alongside cabling and power systems for large-scale facilities.

Expansion Plans and Production Targets

Foxconn expects to assemble up to 2,000 server racks per week in the US by 2026. The expansion aligns with its strategy to reduce reliance on iPhone assembly for Apple Inc. and strengthen its position in the AI hardware ecosystem. Liu confirmed that Foxconn is already involved in OpenAI and Oracle Corp.’s Stargate project, operating a server production site owned by SoftBank Group Corp.

Broader AI Infrastructure Push

OpenAI, Oracle and SoftBank have announced plans to invest $500 billion in US data centres and AI infrastructure over the next few years, following policy priorities under the current US administration. Foxconn’s US expansion supports these goals while mitigating tariff risks. The company also revealed new initiatives, including an electric vehicle called Model A for Japan and a robotics venture with Intrinsic to develop smart factories.

Robotics and Automation Outlook

Liu highlighted growing opportunities in robotics, noting that humanoid robots could soon handle the remaining 10–20% of factory tasks requiring human dexterity. “Most of our production lines are highly automated already,” he said, adding that advanced robotics will complement existing automation systems. Nvidia CEO Jensen Huang recently described robotics as a trillion-dollar opportunity, underscoring its rising prominence in industrial settings.

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Conclusion

Foxconn’s planned investment and partnership with OpenAI signal a strategic pivot towards AI infrastructure and advanced manufacturing. By expanding server production capacity in the US and exploring robotics-driven automation, the company aims to capture growth in emerging technologies while reducing dependence on consumer electronics. 

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