How an OpenAI-Broadcom deal could alter chip sphere

Broadcom Inc. is helping OpenAI design and produce an artificial intelligence accelerator from 2026, getting into a lucrative sphere dominated by Nvidia Corp. Its shares jumped by the most since April.

- BY DINA BASS

BROADCOM is among the chip designers benefiting from a post-ChatGPT boom in AI development.

The two firms plan to ship the first chips in that lineup starting next year, a person familiar with the matter said, asking to remain anonymous while discussing a private deal.

OpenAI will initially use the chip for its own internal purposes, the Financial Times reported earlier.

Broadcom’s shares surged as much as 16% in New York trading Friday, adding more than $200 billion to the company’s market value. Nvidia's stock was down as much as 4.3% at $164.22, its biggest intraday decline since May.

Chief Executive Officer Hock Tan made veiled references to that partnership Thursday when he said Broadcom had secured a new client for its custom accelerator business. Tan said the company has secured more than $10 billion in orders from the new customer, which the person familiar with the matter identified as OpenAI.

Accelerators are essential to the development of AI at big tech firms from Meta Platforms Inc. to Microsoft Corp. Bloomberg News has previously reported that OpenAI and Broadcom were working on an inference chip design, intended to run or operate artificial intelligence services after they had been trained.

“Last quarter, one of these prospects released production orders to Broadcom,” Tan said, without naming the customer.