OpenAI (OPAI.PVT) announced on Monday that it has entered into an agreement with Broadcom (AVGO) that will see the two codevelop up to 10 gigawatts of AI accelerators.
The announcement comes just a week after OpenAI announced a multiyear, multibillion-dollar deal with AMD (AMD) that will see the chipmaker provide OpenAI with up to 6 gigawatts of AI processors.
Shares of Broadcom jumped more than 7% on the news in early trading.
OpenAI is the world’s most valuable startup, surpassing Elon Musk’s SpaceX at some $500 billion.
Under the terms of the Broadcom deal, OpenAI said it will design the accelerators and systems, and then develop and deploy them with Broadcom.
“Partnering with Broadcom is a critical step in building the infrastructure needed to unlock AI’s potential and deliver real benefits for people and businesses,” OpenAI CEO Sam Altman said in a statement.
“Developing our own accelerators adds to the broader ecosystem of partners all building the capacity required to push the frontier of AI to provide benefits to all humanity,” he added.
The announcement is another sign that companies are increasingly seeking to develop their own custom silicon to reduce their reliance on both Nvidia (NVDA) and AMD’s chips. Google (GOOG, GOOGL) and Amazon (AMZN) already have their own custom AI chips, as does Microsoft (MSFT).
But that doesn’t mean they’ll abandon Nvidia or AMD anytime soon.
OpenAI recently signed a $100 billion deal with Nvidia that will see the ChatGPT developer deploy up to 10 gigawatts of Nvidia systems.
OpenAI has been on a dealmaking spree, agreeing to terms with the likes of CoreWeave (CRWV) and launching its Project Stargate initiative with Oracle (ORCL).
But the deals have raised questions about how long OpenAI can continue to spend billions while failing to turn a profit.
The moves have also increased concerns about a continued circular AI trade and the potential for an AI bubble.
During a discussion at Italian Tech Week earlier this month, Amazon founder Jeff Bezos said that we’re likely witnessing an AI bubble, but he added that some of those investments will eventually pay off.
“When people get very excited, as they are today, about artificial intelligence, for example … every experiment gets funded, every company gets funded,” Bezos said. “The good ideas and the bad ideas. And investors have a hard time in the middle of this excitement, distinguishing between the good ideas and bad ideas.”
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X/Twitter at @DanielHowley.
