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OpenAI, the developer of ChatGPT, announced on Monday that it is partnering with semiconductor giant Broadcom to design and produce custom computer processors tailored for artificial intelligence applications.
The collaboration marks another major step by OpenAI to solidify its position as a global leader in the generative AI industry, which it helped launch with the release of ChatGPT in November 2022.
According to both companies, the partnership—set to begin next year—will deliver around 10 gigawatts of computing power, an amount comparable to the electricity required to supply a large city.
Under CEO Sam Altman’s leadership, OpenAI has recently secured several large-scale deals with technology companies, including Nvidia, AMD, Oracle, and South Korea’s Samsung and SK Hynix, aimed at expanding its AI infrastructure.
However, despite rapid growth and strong investor interest, the AI sector has yet to achieve financial sustainability. Industry analysts have raised concerns that the massive demand for AI computing could strain power grids, as AI chips and data centres consume significant amounts of energy and resources.
Financial details of the Broadcom agreement were not disclosed, adding to speculation surrounding the cost of OpenAI’s recent partnerships. Some market observers fear the current AI boom could mirror the speculative bubble of the late 1990s dot-com era.
Nevertheless, Broadcom’s shares rose by nearly 10 per cent following the announcement, echoing similar gains seen by AMD and Oracle after their respective deals with OpenAI, which remains the world’s most valuable privately held company.
OpenAI said developing its own chips would enable it to create hardware optimised for its AI models, boosting performance and efficiency.
“Partnering with Broadcom is a crucial step in building the infrastructure needed to unlock AI’s potential and deliver tangible benefits to people and businesses,” said OpenAI CEO Sam Altman.
The new processors will be deployed across data centres operated by OpenAI and its partners to meet the growing global demand for AI services.
Broadcom described the partnership as “a pivotal moment” in AI development, while OpenAI reported that its services now attract over 800 million weekly users, making ChatGPT the fastest-growing consumer application in history.
