OpenAI taps Broadcom to build its first AI processor in latest chip deal

OpenAI has partnered with Broadcom AVGO

OpenAI has partnered with Broadcom AVGO.O to produce its first in-house artificial intelligence processors, the latest chip tie-up for the ChatGPT maker as it races to secure the computing power needed to meet surging demand for its services.

Shares of Broadcom rose more than 7% in early trading.

The companies said on Monday that OpenAI would design the chips, which Broadcom will develop and deploy starting in the second half of 2026. They will roll out 10 gigawatts’ worth of custom chips, whose power consumption is roughly equivalent to the needs of more than 8 million U.S. households or five times the electricity produced by the Hoover Dam.

The agreement is the latest in a string of massive AI chip investments that have highlighted the technology industry’s surging appetite for computing power as it races to build systems that meet or surpass human intelligence.

OpenAI last week unveiled a 6-gigawatt AI chip supply deal with AMD AMD.O that includes an option to buy a stake in the chipmaker, days after disclosing that Nvidia NVDA.O plans to invest up to $100 billion in the startup and provide it with data-center systems with at least 10 gigawatts of capacity.