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It's the latest big deal between OpenAI, maker of ChatGPT, and
the companies building the chips and data centers required to
power AI.
OpenAI in recent weeks has announced partnerships with
chipmakers Nvidia and AMD that will supply the AI startup with
specialized chips for running its AI systems. OpenAI has also
made big deals with Oracle, CoreWeave and other companies
developing the data centers where those chips are housed.
Many of the deals rely on circular financing, in which the
companies are both investing in OpenAI and supplying the world's
most valuable startup with technology, fueling concerns about an
AI bubble. OpenAI doesn't yet turn a profit but says its
products now have more than 800 million weekly users.
“What’s real about this announcement is OpenAI’s intention of
having its own custom chips,” said analyst Gil Luria, head of
technology research at D.A. Davidson. “The rest is fantastical.
OpenAI has made, at this point, approaching $1 trillion of
commitments, and it’s a company that only has $15 billion of
revenue.”
OpenAI CEO Sam Altman said the work with Broadcom to develop a
custom chip began about 18 months ago. Broadcom also works with
other leading AI developers, including tech giants Amazon and
Google.
Altman said on a podcast announcing the deal that the computing
power made possible through the Broadcom partnership will amount
to 10 gigawatts, which he described as “a gigantic amount of
computing infrastructure to serve the needs of the world to use
advanced intelligence.”
Broadcom shares surged more than 9% on Monday.
Broadcom CEO Hock Tan said on the same podcast that OpenAI needs
more computing capacity as it progresses toward a “better and
better frontier model and towards superintelligence.”
“If you do your own chips, you control your destiny,” he added.
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