OpenAI and Broadcom Ink Historic $500B AI Chip Agreement
OpenAI unveiled a monumental partnership with Broadcom on Monday, aiming to create 10 gigawatts of bespoke AI accelerators. This marks one of the most significant semiconductor procurement agreements in history. The collaboration will involve OpenAI designing its own chips, while Broadcom takes charge of development and deployment. The computing capacity is equivalent to 26 nuclear reactors.
Industry estimates suggest that the deal could cost OpenAI between $350-500 billion over several years. “By building our own chip, we can embed what we’ve learned from creating frontier models and products directly into the hardware, unlocking new levels of capability and intelligence,” stated OpenAI co-founder Greg Brockman.
This partnership follows recent deals with Nvidia ($100 billion) and AMD (6 gigawatts), bringing OpenAI’s total chip commitments to over 26 gigawatts. Broadcom shares surged nearly 10% on the news, adding over $150 billion to its market value.
The custom chips are projected to be significantly more cost-effective than current Nvidia alternatives, while offering superior performance for AI inference tasks. Deployment is scheduled to commence in late 2026, with full rollout completed by 2029.
Source: CNBC