The chairman of Foxconn believes that the AI investment boom may not peak yet as language models continue to improve.

• Young Liu, the Chairman of Foxconn, stated on CNBC that the growth of artificial intelligence is not yet at its peak, as AI models continue to improve with each new release.
• The development of AGI, or Artificial General Intelligence, can only benefit the AI server industry, which has contributed significantly to Foxconn's growth this year.
• Liu stated that the demand for Nvidia's upcoming Blackwell server chip, which Foxconn is manufacturing, is "far greater than anticipated."

As the CEO of a key supplier to states, the growth in corporate investment into artificial intelligence infrastructure is not yet at its peak, as large language models are still undergoing evolution.

Young Liu, CEO and Chairman of Foxconn, stated in an interview with CNBC's Emily Tan that the AI boom is not yet at its peak, as advanced language models from companies like OpenAI continue to improve with each new iteration.

The tech industry is moving towards AI that is as intelligent, if not more so, than humans, which is known as "AGI" or Artificial General Intelligence.

Liu stated in an interview with CNBC that aired on Tuesday that we heard about AGI and will discuss various levels of intelligence. If you divide intelligence into four levels, we are currently at level two. There are still levels three and four to achieve.

Microsoft-backed startup CEO Sam Altman has stated that AGI will be developed in the "reasonably close-ish future," but he believes it will "change jobs much less than we all think."

OpenAI, which released its upgraded GPT-4o model this summer, announced last week that it had raised $6.6 billion at a $157 billion valuation. The company is still working on its next-generation LLM, GPT-5, but has not yet shared a timeline for its launch.

The development of increasingly intelligent AI will benefit the AI server industry, which has contributed significantly to Foxconn's growth this year, as stated by Liu.

"Liu stated that the AI server industry still has room for growth, and we should closely monitor the development of AGI capability and its impact on the age of AI devices."

Strong demand for Nvidia's Blackwell chip

Hon Hai, a company that operates under the name Foxconn in China and Taiwan, is the world's largest contract manufacturer for the electronics industry. The company produces and assembles a wide range of products, including approximately two out of every three iPhones.

On Saturday, Foxconn announced that it had better-than-expected sales figures. The company's revenues for the September quarter were 1.85 trillion Taiwanese dollars ($57.5 billion), which was a 20.2% increase year-over-year. This exceeded the company's original expectations of significant growth, according to Foxconn.

The heightened demand for AI servers led to a strong performance by Foxconn, which manufactures these servers for major global tech giants such as Amazon, Apple, Microsoft, and Google.

Liu informed CNBC that the company is on track to ship Nvidia's next-generation Blackwell GPU, an advanced AI server chip, in the fourth quarter of 2024. Blackwell is also known under the brand name GB200.

Liu stated that the demand for Blackwell's chip is "much better than we thought," and the company is constructing new factories in Mexico to meet the increased demand for the product.

Jensen Huang, CEO of Nvidia, previously stated that demand for Blackwell is "insane," which aligns with his comments made last week on CNBC's "Closing Bell Overtime."

During the interview that aired last Wednesday, Huang stated that everyone desires to possess the greatest amount and be the first.

The demand for Blackwell, which is predicted to cost between $30,000 and $40,000 per unit, is high among companies such as OpenAI, Microsoft, and other firms developing AI data centers to support products like ChatGPT and Copilot.

AI devices the next growth opportunity

Foxconn is not only responsible for creating IT infrastructure for cloud-based AI applications such as ChatGPT but also powers the new iPhone 16, equipped with the latest generative AI features that Apple aims to revitalize the smartphone industry.

Liu from Foxconn stated that processing data directly on a mobile device, rather than a cloud or server, represents the next significant growth opportunity for the company.

"Liu stated to CNBC that he believes the next way to expand will be through genAI-related devices. Currently, genAI cloud equipment is experiencing significant growth."

"In the next phase, Gen AI devices will be seen, and we believe they will be the next big way to boom. We have high hopes for these devices."

Apple Intelligence, the company's AI system, is not yet available on iPhone. However, it is expected to be released in a beta version as part of an upcoming software update later this fall.

Besides Apple, Samsung, and Huawei spinoff Honor, smartphone makers are aiming for a "supercycle" of continuous growth in the industry by incorporating AI features into their latest handsets.

This year, smartphone sales have experienced a resurgence following a series of declines in previous years. In the second quarter of 2024, smartphone shipments increased by 6.5% compared to the same period last year, reaching 285.4 million units, according to preliminary data from IDC. This marks the fourth consecutive quarter of growth in smartphone sales.