OpenAI, the maker of ChatGPT, is reportedly preparing to produce its first in-house artificial intelligence (AI) chip in partnership with U.S. semiconductor giant Broadcom, according to a Financial Times report. The custom chip, expected to debut in 2026, will initially be used for OpenAI’s own workloads, aligning with strategies already pursued by Google, Amazon, and Meta, who have developed proprietary hardware to power their AI systems.

Broadcom Secures Major Client Deal

The development follows Broadcom CEO Hock Tan's revelation earlier this week that an undisclosed new client had committed to a USD 10 billion order for custom chips. Speaking during the company’s earnings call, Tan described the agreement as bringing “immediate and fairly substantial demand,” with shipments set to begin as early as next year. While Broadcom did not name the customer, reports indicate that OpenAI is the partner.

Collaboration Builds on Earlier Ties

Reports last year suggested that OpenAI and Broadcom had already started initial collaboration on chip development, though a timeline for mass production was unclear. The new agreement strengthens speculation that OpenAI is Broadcom’s fourth major client in its growing custom chip business.

Reducing Reliance on Nvidia

Currently, Nvidia leads the AI hardware market, serving as the main supplier. The AI startup has been among Nvidia’s largest customers. However, OpenAI CEO Sam Altman has repeatedly emphasized the urgent need for increased computing capacity to meet the soaring demand for AI. Just last month, Altman said the company would double its computing power within five months to support the rollout of its new GPT-5 model.

Market Confidence in Broadcom

According to HSBC analysts, the company’s custom chip business could grow even faster than Nvidia’s by 2026. Investor confidence has surged, with Broadcom shares up more than 30% this year and rising nearly 9% in pre-market trading in New York on Friday following the earnings announcement.

Growing Competition in AI Hardware

OpenAI’s move highlights a broader industry trend, as major AI firms seek custom hardware solutions to gain efficiency, lower costs, and strengthen independence from Nvidia’s dominant GPUs. For Broadcom, the deal marks another significant milestone in its expanding portfolio of partnerships, positioning the company firmly at the forefront of the AI infrastructure race.

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