OpenAI in Talks with Broadcom and Others for New AI Chip Development

OpenAI partnership is a 'further validation of Broadcom's leading position': Wells Fargo By Investing.com

Wells Fargo analysts have emphasized that the recent partnership between OpenAI and Broadcom (NASDAQ:AVGO) for the development of AI-optimized chips is a significant endorsement of Broadcom's expertise in custom AI silicon. According to a report from The Information, OpenAI is collaborating with Broadcom to create a new AI chip, marking a substantial recognition of Broadcom's prowess as a premier provider of custom AI silicon (XPU) solutions. Broadcom's shares gained following the news, underscoring the market's positive reaction to this development. Analysts highlighted this partnership as "further validating Broadcom's position as the leading partner for internal AI-optimized silicon development." The report also mentioned that Richard Ho, a former Google employee who worked on Google's Tensor Processing Unit (TPU), is leading OpenAI's chip-focused team. The development of the new AI chip is expected to take several years, with production likely commencing in 2026 at the earliest. Broadcom is already a key partner for Google's TPUs, and its AI silicon customer base includes major players like Google and Meta. Wells Fargo said the company's projections indicate that custom AI XPUs will make up approximately 70% of its anticipated $11 billion+ AI semiconductor revenue in fiscal 2024. The bank notes that Broadcom's slides from their March Enabling AI Infrastructure event illustrate plans for up to seven new custom XPUs shipping between 2025 and 2026. This diversification and expansion into custom AI silicon solidify Broadcom's leading position in the market. Additionally, analysts highlighted that OpenAI's founder and CEO, Sam Altman, has ambitious plans to expand chip manufacturing capacity, potentially raising up to $7 trillion in capital, further highlighting the scale of this endeavor.

Broadcom held discussions with OpenAI about producing AI chip: report

Broadcom (NASDAQ:AVGO) has had discussions with OpenAI, the generative artificial intelligence startup backed by Microsoft (MSFT), about building a new artificial intelligence server chip, The Information reported. OpenAI has hired engineers from the unit of Google (GOOG) (GOOGL) that created its tensor processing unit in an effort to create its own AI server chip, the news outlet added, citing three people involved in the conversations. The efforts to create its own AI server chip -- which in turn could reduce its reliance on Nvidia (NASDAQ:NVDA) -- are a part of OpenAI Chief Executive Sam Altman's vision to boost the global semiconductor infrastructure. Altman has publicly complained about the lack of access to AI infrastructure. "The world needs more AI infrastructure - fab capacity, energy, datacenters, etc. - than people are currently planning to build," Altman previously said. "OpenAI will try to help!" Broadcom has a unit that works with companies like Google and others to make chips for them, known as application-specific integrated circuits. If such a chip were built, it would not be produced until 2026 at the earliest, one of the people added, as details are still being worked out. These include chip packaging and memory components, among others. Altman has spoken with South Korea's Samsung (OTCPK:SSNLF) and SK Hynix about the need for high-bandwidth memory and his chip plans, The Information added, citing two people with knowledge of the conversations. Altman has also spoken with Taiwan Semiconductor (TSM) to see if the global foundry if they could increase production of Nvidia's chips or if they could produce the proposed AI chip from OpenAI, the news outlet added. OpenAI and Broadcom did not immediately respond to a request for comment from Seeking Alpha. Broadcom shares ended Thursday with a gain of 2.9%, bucking the broader market decline. More on Broadcom and Nvidia Here Is Why Nvidia Still Has More Upside Nvidia: Prepare For A Correction In H2 2025 Or H1 2026 Broadcom: Hanging On To One Of My Favorite Dividend Growth Stocks Nvidia CEO sells another $30.6M in shares as part of option plan Chips lose $500B in market cap amid export control fears, Trump's Taiwan comments

OpenAI and Broadcom in talks about developing new AI chip

OpenAI has been in talks with semiconductor designers including Broadcom about developing a new chip, as the artificial intelligence company looks to ease its reliance on Nvidia and bolster its supply chain. The talks are part of efforts spearheaded by the company's co-founder and chief executive Sam Altman to beef up the supply of components and infrastructure required to run increasingly powerful AI models. "The limiting factor of AI is capacity: chip capacity, energy capacity, compute capacity. [OpenAI] is not just going to sit back and let others build [that] when they are on the front line," said one person with knowledge of OpenAI's plans. Altman has engaged with chipmakers, partners, including Microsoft, government bodies and financial backers in an effort to boost capacity and retain his company's position at the centre of a massive boom in the technology, which was kicked off by the release of the San Francisco company's ChatGPT chatbot in late 2022. The talks between OpenAI and Broadcom, which were first reported by The Information, have centred on the role Broadcom could play in developing a new chip for OpenAI. The talks were at an early stage and OpenAI had "engaged across the industry", according to a person with knowledge of the discussions. "OpenAI is having ongoing conversations with industry and government stakeholders about increasing access to the infrastructure needed to ensure AI's benefits are widely accessible," OpenAI said in a statement. "This includes working in partnership with the premier chip designers, fabricators and the brick and mortar developers of data centres." Broadcom did not respond to a request for comment. Powerful semiconductors are among the hottest commodities for top AI companies. OpenAI, Microsoft and chief rivals Anthropic and Google are particularly reliant on Nvidia's cutting-edge graphics processing units to train and run their models. OpenAI is unlikely to compete with Nvidia's technological prowess in the near term, but the company has been exploring a variety of ways to become more self-reliant in its pursuit of artificial general intelligence -- AI that can outperform humans across a range of cognitive tasks. Even with the backing of Microsoft, which has committed $13bn, the start-up would need outside financial support or commercial partnerships to bring its plans to fruition, according to the person with knowledge of the plans. "It's fair to say it requires massive sums of money to do this stuff," the person said.

OpenAI reportedly holding talks with Broadcom and others to develop new AI server chip - SiliconANGLE

OpenAI reportedly holding talks with Broadcom and others to develop new AI server chip OpenAI is reportedly talking with chip designers, including Broadcom Inc., about developing a new artificial intelligence chip for servers. The Information claims that the initiative is being led by OpenAI Chief Executive Officer Sam Altman and is part of a larger plan to increase the company's computing power for AI development. The idea of developing new AI chips is also said to be part of a push by OpenIA to overcome a shortage of graphics processing units that are currently used to develop AI models, with most of those GPUs coming from Nvidia Corp. OpenAI is also said to be hiring former Google LLC employees who were involved in the development and production of Google's tensor processing unit - an AI accelerator application-specific integrated circuit - to help with its AI chip design efforts. Notably, Broadcom worked with Google to develop the TPU, meaning that it has experience in building custom AI-related chips. While OpenAI did not entirely confirm nor denied the report, a spokesperson did say that "OpenAI is having ongoing conversations with industry and government stakeholders about increasing access to the infrastructure needed to ensure AI's benefits are widely accessible." That OpenAI is interested in developing its own AI chips comes as zero surprise, with the company first reported to have been looking at developing custom AI chips back in September. In January, it was reported that Altman had held fundraising talks with SoftBank Group Corp. and Abu Dhabi-based G42 to raise billions for a new chip manufacturing venture. In February, the billions turned into trillions, with Altman reported to be looking to raise a staggering $7 trillion for a new chip venture. Whether Altman and OpenAI are still interested in building a new chip fab is not clear. Given the $7 trillion amount allegedly being sought was larger than the economies of Australia and Japan combined, the insane figure was likely simply too much for Altman and OpenAI to raise, making a partnership with an existing company like Broadcom far more practical and cheaper. Whatever way Altman and OpenAI go, their endeavors have one target: Nvidia. The Taiwanese company has come to dominate the AI chip space and was, for a time, the largest company in the world. While today it's currently in third place, not far behind Microsoft Corp. and Apple Inc., Nvidia's rise, off the back of AI, has been remarkable. As AI has grown, so to has Nvidia, but one company with an estimated AI chip market share of between 70% to 95% of the market means that AI companies are at Nvidia's beck and call in terms of access to computing. OpenAI building a new chip with Broadcom or opening its own chip fab comes back to not having to rely on Nvidia nearly exclusively for AI processing chips.

OpenAI holds talks with Broadcom about developing new AI chip, the Information reports

ChatGPT maker OpenAI is in discussion with chip designers, including Broadcom, about developing a new artificial intelligence chip, the Information reported on Thursday, citing people familiar with the matter. OpenAI is exploring the idea of making AI chips on its own to overcome the shortage of expensive graphic processing units that it relies on to develop AI models such as ChatGPT, GPT-4, and DALL-E3. The Microsoft-backed company is hiring former Google employees who produced the online search giant's own AI chip, the tensor processing unit, and has decided to develop an AI server chip, the report added, citing three people who have been involved. "OpenAI is having ongoing conversations with industry and government stakeholders about increasing access to the infrastructure needed to ensure AI's benefits are widely accessible," a spokesperson for OpenAI told the Information. Bloomberg News reported earlier this year that OpenAI CEO Sam Altman has plans to raise billions of dollars for setting up a network of factories to manufacture semiconductors with chipmakers Intel, Taiwan Semiconductor Manufacturing Co and Samsung Electronics as potential partners. (Reporting by Priyanka.G in Bengaluru; Editing by Mohammed Safi Shamsi)

OpenAI holds talks with Broadcom about developing new AI chip, the Information reports

The Microsoft-backed company is hiring former Google employees who produced the online search giant's own AI chip, the tensor processing unit, and has decided to develop an AI server chip, the report added, citing three people who have been involved. "OpenAI is having ongoing conversations with industry and government stakeholders about increasing access to the infrastructure needed to ensure AI's benefits are widely accessible," a spokesperson for OpenAI told the Information. Bloomberg News reported earlier this year that OpenAI CEO Sam Altman has plans to raise billions of dollars for setting up a network of factories to manufacture semiconductors with chipmakers Intel, Taiwan Semiconductor Manufacturing Co and Samsung Electronics as potential partners. (Reporting by Priyanka.G in Bengaluru; Editing by Mohammed Safi Shamsi)

OpenAI holds talks with Broadcom about developing new AI chip: Report - ET Telecom

Internet 1 min read OpenAI holds talks with Broadcom about developing new AI chip: Report The Microsoft-backed company is hiring former Google employees who produced the online search giant's own AI chip, the tensor processing unit, and has decided to develop an AI server chip, the report added, citing three people who have been involved. ChatGPT maker OpenAI is in discussion with chip designers, including Broadcom, about developing a new artificial intelligence chip, the Information reported on Thursday, citing people familiar with the matter. OpenAI is exploring the idea of making AI chips on its own to overcome the shortage of expensive graphic processing units that it relies on to develop AI models such as ChatGPT, GPT-4, and DALL-E3. The Microsoft-backed company is hiring former Google employees who produced the online search giant's own AI chip, the tensor processing unit, and has decided to develop an AI server chip, the report added, citing three people who have been involved. "OpenAI is having ongoing conversations with industry and government stakeholders about increasing access to the infrastructure needed to ensure AI's benefits are widely accessible," a spokesperson for OpenAI told the Information. Bloomberg News reported earlier this year that OpenAI CEO Sam Altman has plans to raise billions of dollars for setting up a network of factories to manufacture semiconductors with chipmakers Intel, Taiwan Semiconductor Manufacturing Co and Samsung Electronics as potential partners.

OpenAI's leap into AI chip development to counter GPU scarcity

Also, Bloomberg News reported earlier this year that OpenAI CEO Sam Altman intends to raise billions of dollars to build out a network of semiconductor manufacturing plants with major chipmakers such as Intel, Taiwan Semiconductor Manufacturing Co., and Samsung Electronics as potential partners for this hugely ambitious project. On this note, OpenAI's move to develop its AI chips will drastically reduce dependence on external GPU suppliers and boost capabilities in the development of AI models. OpenAI has a tendency to enter collaborations with industry giants and commit huge investments to the production process of semiconductors, ensuring a robust and self-sufficient infrastructure for the continuous progress in AI innovation. This puts custom hardware at the very front in the advancement of artificial intelligence.