Altman had been trying to raise $100 billion from investors in the Middle East and SoftBank founder Masayoshi Son to build a rival to compete with sector giants Nvidia and Taiwan Semiconductor Manufacturing Co.

The FT pointed out that $100 billion may not be enough as Nvidia and TSMC have the market sewn up. Nvidia has about 95 per cent of the markets for GPU, or graphics processing units and TSMC has about 90 per cent of the world’s advanced chip market.

Nvidia has a head start because it has been developing GPUs for more than two decades and has hardware and software libraries protected by more patents than you can poke a stick at.

Once an AI chip is designed, setting up a fabrication plant is another hurdle. It is expected to take more than three years for TSMC to get the US plant it is building in Arizona to start production, despite having more than three decades of experience building “fabs”. Its overall investment into this plant is expected at about $40 billion.

Another issue is buying the chipmaking gear that goes into the plants. Dutch maker ASML has a monopoly on the extreme ultraviolet lithography machines that are critical for producing advanced chips. The waiting list for the machines, which cost more than $300 million each is about two years.

Rivals trying to enter the market have enough patents to match TSMC which has more than 52,000 patents related to chipmaking. Of them, around 3,000 are on its advanced packaging — a crucial technology for AI chips that boosts performance and where TSMC has the edge over rival Samsung in contract manufacturing. TSMC’s over eight years of investment in the technology has pushed the barriers to entry yet higher.

The FT said that with momentum in their favour, the gap between Nvidia, TSMC, and their competitors has been widening over the past year. For now, not even their biggest rivals are sufficiently equipped to close that gap, let alone new joiners such as OpenAI.