Broadcom Shares Surge 10 Percent
OpenAI, the developer of ChatGPT, announced on October 13 (local time) that it has signed a supply agreement for artificial intelligence (AI) chips with semiconductor company Broadcom, covering a capacity of 10 gigawatts (GW).
On the same day, OpenAI and Broadcom issued a joint statement announcing that they have entered into a partnership for the supply of accelerators and network systems for next-generation AI clusters.
The two companies stated that Broadcom will custom-develop and supply AI chips and systems designed by OpenAI. Broadcom plans to deploy AI accelerators and network systems to OpenAI's data centers, starting in the second half of next year and continuing through the end of 2029.
Through this agreement, OpenAI will be able to enhance efficiency with its optimized, self-designed chips. Meanwhile, Broadcom, which has been overshadowed in the AI chip market by companies such as Nvidia, will be able to strengthen its position.
Sam Altman, CEO of OpenAI, revealed that the company has been collaborating with Broadcom for 18 months in preparation for this agreement.
He described the partnership with Broadcom, including the development of proprietary AI chips, as "a critical step in building the infrastructure necessary to realize the potential of AI and deliver real benefits to people and businesses." He also emphasized, "If we can optimize the entire computing stack, we can achieve tremendous efficiency, which will lead to much better performance, faster models, and more affordable models."
Broadcom CEO Hock Tan stated, "As we advance the roadmap toward better advanced models and artificial superintelligence, the need for the best state-of-the-art computing performance continues," adding, "By developing our own chips, we can control our own destiny."
However, the two companies did not disclose specific terms of the contract, such as the price of the chips Broadcom will supply or the overall scale of the agreement.
According to Bloomberg, securing 1 GW of AI computing capacity currently requires approximately $35 billion in chip costs. For 10 GW, the total would be $350 billion. Citing sources, Bloomberg reported that OpenAI is planning additional spending of tens of billions of dollars on Broadcom chips.
On the New York Stock Exchange that day, Broadcom's share price at one point surged more than 10% during trading, ultimately closing up 9.88%. Since the beginning of this year, Broadcom's share price has risen by about 54%.
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