OpenAI has officially confirmed its move into self-developed AI hardware through a long-term collaboration with Broadcom — a partnership that immediately sent Broadcom’s stock surging by more than 10% following the announcement.
The companies will co-develop and deploy 10 gigawatts of custom AI chips, specifically optimized for OpenAI’s next-generation models and infrastructure. The project represents a major milestone in OpenAI’s ambition to vertically integrate its hardware and software ecosystems.
A Strategic Partnership to Build the AI Stack from Silicon Up #
According to a joint statement, OpenAI and Broadcom have signed a long-term supply and co-development agreement. Under this deal, racks containing OpenAI-designed chips and Broadcom’s networking technologies will be deployed across OpenAI’s own facilities and partner data centers.
Broadcom will begin deployment in the second half of 2026, with full-scale rollout expected by the end of 2029. The collaboration covers both vertical (scale-up) and horizontal (scale-out) AI infrastructure — powered by Broadcom’s advanced Ethernet, PCIe, and optical connectivity solutions.
By designing its own silicon, OpenAI aims to embed its model development expertise directly into hardware, achieving deeper optimization for inference, training, and efficiency across the entire AI stack.
“When it became clear how much capability and inference the world was going to need, we started thinking — can we go make a chip just for that very specific workload? Broadcom is clearly the best partner in the world for that,”
— Sam Altman, OpenAI CEO
OpenAI President Greg Brockman added that the chip design itself leverages OpenAI’s own models, underscoring the company’s end-to-end AI development strategy.
The Largest Industrial Project in AI History? #
During a 28-minute joint podcast, OpenAI’s leadership — including Sam Altman and Greg Brockman — sat alongside Broadcom’s Hock Tan and Charlie Kawwas to discuss the collaboration’s implications.
Altman described the partnership as potentially “the largest combined industrial project in human history.”
Kawwas went even further, calling it “the next-generation operating system for humanity.”
Altman emphasized the unprecedented opportunity to optimize performance from transistor to token — integrating everything from semiconductor design and rack architecture to network topology and inference algorithms.
This vertical integration, he noted, enables massive efficiency gains, delivering faster, cheaper, and more powerful models.
OpenAI’s Expanding Hardware Ecosystem #
This partnership marks OpenAI’s third major deal with a chipmaker in just over a month:
- September 23, 2025: Nvidia announced a $100 billion investment in OpenAI, including plans for at least 10 GW of Nvidia systems.
- October 6, 2025: OpenAI revealed a deal to deploy 6 GW of AMD GPUs and acquire up to 160 million shares of AMD, signaling deep collaboration.
- October 14, 2025: The Broadcom partnership adds custom silicon and networking integration to OpenAI’s growing hardware ecosystem.
The result is a diverse and powerful AI infrastructure spanning Nvidia, AMD, and now OpenAI’s own chips — all networked via Broadcom’s Ethernet backbone.
Toward Artificial General Intelligence (AGI) #
While 10 gigawatts of compute power is enormous by today’s standards, Brockman noted that it still represents only a “tiny drop in the bucket” compared to what is required for AGI.
He highlighted OpenAI’s unique ability to apply its own AI models to chip design itself, creating a feedback loop between model development and hardware innovation.
Kawwas, meanwhile, discussed OpenAI’s use of 3D stacking and optical interconnect technologies — innovations expected to double cluster performance every 6–12 months.
These chips will tightly integrate with Broadcom’s Ethernet-based scale-out and scale-up systems, optimizing cost and performance across OpenAI’s global compute network.
Industry Impact and Market Reaction #
The market response was swift: Broadcom shares soared more than 10% following the announcement.
As of mid-October, Broadcom’s market capitalization has reached $1.68 trillion, while OpenAI’s valuation stands at roughly $500 billion, making it the world’s most valuable private startup.
This deal further blurs the boundaries between AI developers and hardware manufacturers, with OpenAI positioning itself not just as a software company but as a full-stack AI infrastructure provider.
However, the rapid escalation of AI investments — from Nvidia’s and AMD’s massive commitments to OpenAI’s own hardware ventures — has also fueled concerns of an emerging AI bubble in financial markets.
A New Phase of AI Infrastructure #
Altman described OpenAI’s growth in compute infrastructure as exponential: from 2 megawatts in its early days to 2 gigawatts by the end of this year, and now planning for 10 gigawatts of custom capacity.
“You can look at building AI infrastructure in a lot of ways,” Altman said,
“and you’d say this is the largest combined industrial project in human history.”
As OpenAI and Broadcom move toward deploying these next-generation systems, they aim not only to meet the world’s AI compute demands but also to redefine how intelligence itself is built — from transistor physics to generative reasoning.
In Summary #
- Partnership: OpenAI and Broadcom co-develop 10 GW of custom AI chips and systems
- Timeline: Deployment from 2026 to 2029
- Goal: Full-stack AI optimization — from chip to model
- Impact: Broadcom stock up 10%, OpenAI valuation hits $500B
- Vision: Laying the hardware foundation for AGI and next-gen computing
With its partnerships spanning Nvidia, AMD, and now Broadcom, OpenAI is no longer just a software lab — it’s becoming a vertically integrated AI infrastructure powerhouse shaping the future of artificial intelligence.