OpenAI Enters AI Chip Market

Broadcom is collaborating with OpenAI to design and manufacture an AI accelerator, with the first units expected in 2026. This move signifies OpenAI's effort to reduce its reliance on Nvidia, whose accelerators currently dominate the market. OpenAI plans to use these chips internally to meet the growing computing demands of its AI programmes.

Broadcom's CEO, Hock Tan, alluded to this partnership, mentioning a significant order from a new customer for AI accelerators, which sources later identified as OpenAI. This development has led Broadcom to anticipate a considerable improvement in its fiscal 2026 AI revenue.

OpenAI's strategy aligns with other major tech players like Google, Amazon, and Meta, who are also designing custom chips for AI workloads. This initiative could potentially position OpenAI as a direct competitor to Nvidia in the AI hardware sector.