OpenAI Collaborates with Broadcom on Custom AI Chip Development

Published  October 30, 2024   0
OpenAI Collaborates with Broadcom

OpenAI's collaboration with Broadcom and TSMC signifies a shift towards custom AI chips, with Broadcom shares closing up 4.2% to $179.24 in New York trading on Tuesday.

In a significant step towards reducing reliance on external suppliers, OpenAI has partnered with Broadcom to develop its first custom in-house AI chip. This initiative is part of OpenAI’s broader strategy to control rising compute costs, driven by the demand for running and training complex AI models like ChatGPT. Working with Taiwan Semiconductor Manufacturing Company (TSMC) for chip production, OpenAI aims to debut this specialized chip by 2026, bringing stability and efficiency to its AI infrastructure.


Different from general-purpose GPUs, OpenAI’s custom chip will highlight interpretation capabilities vital for processing tasks once AI models are trained. Currently, Nvidia dominates this space, serving as a key supplier for OpenAI. However, OpenAI plans to diversify by adding AMD’s latest chips to its infrastructure via Microsoft’s Azure platform, ensuring greater resource flexibility. Broadcom’s expertise in designing application-specific chips, coupled with TSMC’s advanced manufacturing capabilities, is expected to support OpenAI’s in-house chip ambitions, allowing it to better balance performance needs and supplier dependencies.


Amid a global chip shortage, OpenAI’s proactive approach reflects its commitment to meeting the growing demand for AI capabilities while managing costs. The custom chip is being developed by a team with specialized expertise, including former Google engineers known for their work on Tensor Processing Units (TPUs). Following this news, Broadcom’s stock price climbed over 4.2%, while AMD shares also ended the day with gains, indicating positive market analysis. By collaborating with Broadcom and leveraging TSMC’s production facilities, OpenAI seeks to enhance its computing power independently. This collaboration not only reinforces OpenAI’s infrastructure but positions it as a leader in the evolving field of custom AI hardware, making it well-prepared for the future demands of the semiconductor market.