OpenAI partners with Broadcom to design its own AI chips

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OpenAI said Monday it is working with chipmaker Broadcom to design its own artificial intelligence computer chips.

The two California companies didn't disclose the financial terms of the deal but said they will start deploying the new racks of customized “AI accelerators” late next year.

It's the latest big deal between OpenAI, maker of ChatGPT, and the companies building the chips and data centers required to power AI.

OpenAI in recent weeks has announced partnerships with chipmakers Nvidia and AMD that will supply the AI startup with specialized chips for running its AI systems. OpenAI has also made big deals with Oracle, CoreWeave and other companies developing the data centers where those chips are housed.

Many of the deals rely on circular financing, in which the companies are both investing in OpenAI and supplying the world's most valuable startup with technology, fueling concerns about an AI bubble. OpenAI doesn't yet turn a profit but says its products now have more than 800 million weekly users.

“What’s real about this announcement is OpenAI’s intention of having its own custom chips,” said analyst Gil Luria, head of technology research at D.A. Davidson. “The rest is fantastical. OpenAI has made, at this point, approaching $1 trillion of commitments, and it’s a company that only has $15 billion of revenue.”

OpenAI CEO Sam Altman said the work with Broadcom to develop a custom chip began about 18 months ago. Broadcom also works with other leading AI developers, including tech giants Amazon and Google.

Altman said on a podcast announcing the deal that the computing power made possible through the Broadcom partnership will amount to 10 gigawatts, which he described as “a gigantic amount of computing infrastructure to serve the needs of the world to use advanced intelligence.”

Broadcom shares surged more than 9% on Monday.

Broadcom CEO Hock Tan said on the same podcast that OpenAI needs more computing capacity as it progresses toward a “better and better frontier model and towards superintelligence.”

“If you do your own chips, you control your destiny,” he added.