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On Wed, 30 Oct, 12:10 AM UTC
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Broadcom Gains on Report That It's Working With OpenAI
Broadcom Inc. shares gained as much as 4% after Reuters reported that OpenAI is working with the company on a new artificial intelligence chip. OpenAI is using Broadcom and contract manufacturer Taiwan Semiconductor Manufacturing Co. to build an in-house processor that can help handle its burgeoning AI demands, according to Reuters, which cited unidentified people familiar with the project.
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Why Broadcom Stock Is Gaining Today | The Motley Fool
Reuters published a report today stating that OpenAI is working on a new in-house AI chip. Broadcom is assisting with the design of the chip, and Taiwan Semiconductor Manufacturing is also involved in the process. OpenAI is at the forefront of the generative AI trend. The company is responsible for services including ChatGPT, Dall-E, and Sora, and its technologies have relied on hardware from Nvidia and other advanced semiconductor providers. OpenAI is aiming to dramatically expand its capabilities and operations, so it's looking to reduce its dependence on third-party hardware. That could create some opportunities for Broadcom in the near term. Based on the report from Reuters, the chip that OpenAI is designing with Broadcom's help probably isn't being positioned to replace Nvidia's advanced graphics processing units (GPUs). Nvidia's GPUs have been the preferred hardware for the training of artificial intelligence models. Meanwhile, the new chip from OpenAI is being tailored for less computationally intensive AI inference applications. While it's not clear how much of a sales windfall Broadcom might record from helping OpenAI develop its first in-house AI chip, it's a bullish sign for the chip company that it was selected by the AI-software leader for the project. Broadcom stock has rallied roughly 60% year to date, and AI-related business tailwinds and excitement surrounding future opportunities in the space have played a big role in the company's valuation gains.
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OpenAI Chooses Broadcom For AI Interface Chip Development - Microsoft (NASDAQ:MSFT), Broadcom (NASDAQ:AVGO), Advanced Micro Devices (NASDAQ:AMD), Taiwan Semiconductor (NYSE:TSM)
AMD added as supplier to address surging AI demand for OpenAI. OpenAI has partnered with Broadcom Inc AVGO and Taiwan Semiconductor Manufacturing Co TSM to build this in-house chip. The ChatGPT parent added Advanced Micro Devices Inc AMD as a chip supplier to better address artificial intelligence demands. Broadcom, AMD, and Taiwan Semiconductor's stocks gained after the report. Also Read: Intel Partners With AMD To Counter Arm's Rising Dominance in Computing OpenAI is ramping up efforts to produce its chip designed to power advanced AI systems, Reuters reports. OpenAI's move reflects its plans to seek alternatives to manage costs better and reduce dependency on existing suppliers like Nvidia Corp NVDA. Broadcom has been working closely with OpenAI to develop this chip, which primarily focuses on "inference" -- applying AI models to make decisions based on new data. As demand for inference chips grows, OpenAI's custom-built chip could eventually support more applications, complementing its reliance on training chips provided by Nvidia. Securing access to manufacturing capacity with Taiwan Semiconductor has been part of the process. Sources indicate OpenAI plans to produce its first custom-designed chip by 2026. Another notable development is collaboration with AMD. Through Microsoft Corp MSFT Azure, OpenAI will utilize AMD's MI300X chips. Recent analyst takes on Broadcom and AMD JPMorgan analyst Harlan Sur highlights semiconductors as a top investment area for 2024, predicting a solid up-cycle after 2023's sector bottom. Sur noted Broadcom and Marvell Technology Inc MRVL as critical players poised for growth, especially in cloud infrastructure and custom AI chips. Goldman Sachs analysts, led by Toshiya Hari, underscored the sustained expansion of AI infrastructure spending across industries as a driving force behind their bullish take on AMD. Hari flagged increased capital investments from large enterprises engaged in an "AI arms race." Price Actions: At the last check on Tuesday, AVGO stock was up 3.84% to $176.62. AMD is up 3.48%, and TSM is up 1.51%. Also Read: Trump Goes After Taiwan Semiconductor On Joe Rogan Podcast Photo courtesy: Shutterstock This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs
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OpenAI is collaborating with Broadcom and TSMC to develop its first in-house AI chip, focusing on inference tasks. This move aims to reduce dependency on existing suppliers and manage costs better.
OpenAI, the company behind popular AI services like ChatGPT, Dall-E, and Sora, is making a significant move in the artificial intelligence hardware space. According to recent reports, the AI giant is collaborating with Broadcom Inc. and Taiwan Semiconductor Manufacturing Co. (TSMC) to develop its first in-house AI chip 123.
Broadcom, a leading semiconductor company, is assisting OpenAI with the design of the new chip, while TSMC, the world's largest contract chipmaker, will handle the manufacturing process. This partnership aims to create a processor tailored to OpenAI's specific AI needs, particularly focusing on inference tasks – the application of AI models to make decisions based on new data 13.
The development of this custom chip is part of OpenAI's strategy to expand its capabilities while reducing dependence on third-party hardware suppliers. This move could potentially help the company manage costs more effectively and gain greater control over its AI infrastructure 2.
The news of this collaboration has had a positive impact on the stock market. Broadcom's shares gained up to 4% following the Reuters report, reflecting investor optimism about the company's involvement in this high-profile AI project 1. The stock has already seen a significant rally of about 60% year-to-date, largely driven by AI-related business tailwinds 2.
In addition to the Broadcom-TSMC partnership, OpenAI is also diversifying its chip suppliers. The company has added Advanced Micro Devices (AMD) as a chip supplier to better address its growing AI demands. OpenAI plans to utilize AMD's MI300X chips through Microsoft's Azure cloud platform 3.
Sources indicate that OpenAI aims to produce its first custom-designed chip by 2026. While initially focused on inference tasks, there's potential for this chip to support more applications in the future, complementing OpenAI's use of training chips provided by Nvidia 3.
JPMorgan analyst Harlan Sur has highlighted semiconductors as a top investment area for 2024, predicting a solid up-cycle after the sector's bottom in 2023. Sur specifically noted Broadcom's potential for growth in cloud infrastructure and custom AI chips 3.
Goldman Sachs analysts, led by Toshiya Hari, have emphasized the sustained expansion of AI infrastructure spending across industries as a driving force behind their bullish outlook on AMD. They point to increased capital investments from large enterprises engaged in an "AI arms race" 3.
OpenAI's move into custom chip development reflects a growing trend in the tech industry, where major AI players are seeking to optimize their hardware for specific AI workloads. This shift could potentially reshape the AI chip market, currently dominated by companies like Nvidia, and open up new opportunities for collaboration between AI software companies and chip manufacturers 123.
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OpenAI, the company behind ChatGPT, is reportedly in discussions with Broadcom and other chipmakers to develop custom AI chips. This move could potentially reshape the AI hardware landscape and challenge Nvidia's dominance in the market.
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Broadcom's stock soars after reporting strong AI-driven growth and projecting massive AI revenue potential, positioning it to potentially join the $1 trillion market cap club.
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Billionaire Jeff Yass's Susquehanna International Group sells 73% of its Nvidia stake while increasing investment in Broadcom, signaling a strategic shift in AI stock preferences.
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Broadcom, a leading semiconductor company, is projected to capitalize on a $150 billion AI revenue opportunity over the next five years. Analysts are optimistic about the company's potential in the rapidly growing AI market.
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As the AI boom continues, Broadcom is gaining attention as a potential rival to Nvidia in the AI chip market. Billionaire investors and market analysts are increasingly viewing Broadcom as a promising AI stock.
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