OpenAI will develop custom AI chips with Broadcom under a $10 billion investment commitment.

OpenAI will reportedly start producing its own artificial intelligence chips next year through a $10 billion partnership with Broadcom, aiming to reduce its heavy reliance on NVIDIA's scarce processors. The ChatGPT maker has been working with the semiconductor giant for over a year to design custom chips called "XPUs." Mass production will begin in 2026, with initial shipments expected next year. Broadcom CEO Hock Tan confirmed Thursday that his company secured a major new customer worth $10 billion in orders, with multiple sources identifying that customer as OpenAI. During the company's earnings call, Tan stated: "The addition of a fourth customer with immediate and fairly substantial demand really changes our thinking of what 2026 would be starting to look like."

OpenAI plans to use the chips internally rather than sell them to other companies, following the same path as tech giants Google, Amazon, and Meta, which have all developed specialized processors to cut costs and secure steady supplies. This move comes after months of OpenAI CEO Sam Altman warning about processor shortages slowing the company's progress. Altman wrote on X earlier this year: "I'm pretty sure y'all will use every one we can rack up," referring to GPU shortages affecting ChatGPT's rollout. Last month, Altman said OpenAI was prioritizing compute power "in light of the increased demand from GPT-5" and planned to double its compute fleet "over the next 5 months."

NVIDIA currently dominates the AI chip market, but supply has tightened as more developers compete for its hardware. According to Nikolay Filichkin, co-founder of Compute Labs: "If we're talking about hyperscalers and gigantic AI factories, it's very hard to get access to a high number of GPUs. It requires months of lead time and planning with the manufacturers." The custom chips will focus on inference—running AI models after they've been trained—and are designed to complement rather than replace NVIDIA's processors entirely.

Broadcom's stock surged following the announcement, with the company's shares rising more than 30 percent this year as investors bet on growing demand for AI infrastructure. The chip deal will begin contributing to Broadcom's revenue during the summer of 2025, according to Tan. HSBC analysts expect Broadcom's custom chip business to grow faster than NVIDIA's in 2026. This partnership represents OpenAI's latest effort to secure massive computing power, following a $30 billion annual contract with Oracle for cloud hosting and smaller deals with Google for additional capacity.