Prime Highlights:

• Broadcom’s stock jumped 7%after officially announcing its partnership with OpenAI to co-develop custom computing chips.
• The collaboration aims to deploy 10 gigawatts of new computing power, marking a major step in expanding global digital infrastructure.

Key Facts:

• Broadcom’s market valuehas risen to over $1.5 trillion, with its stock up 40% in 2025 following strong performance in 2024.
• OpenAI’s total compute partnershipswith companies like Nvidia, Oracle, and AMD now reach around 33 gigawatts, reflecting growing demand for advanced computing systems.

Key Background:

Broadcom’s stock jumped 7% on Monday after the company and OpenAI officially announced their partnership to co-develop custom artificial intelligence chips. The move follows months of speculation, after Broadcom’s shares surged last month amid reports of a $10 billion customer deal believed to be OpenAI.

The two companies have been collaborating for the past 18 months to design and deploy AI chips optimized for inference and networked through Broadcom’s Ethernet infrastructure. Starting late next year, they plan to roll out racks of OpenAI-designed chips, marking a major expansion in AI infrastructure.

“This partnership represents a significant step in scaling advanced AI systems,” OpenAI CEO Sam Altman said. “The combination of networking, memory, and compute optimized for our workloads will allow us to reduce costs and improve performance.”

The joint effort will initially involve the deployment of 10 gigawatts of AI accelerators, more than four times OpenAI’s current compute capacity of just over 2 gigawatts. Altman said this is just the start, noting the fast-growing global demand for advanced computing and digital infrastructure.

OpenAI has also announced new partnerships with Nvidia, Oracle, and Advanced Micro Devices in recent weeks, adding up to about 33 gigawatts of computing power. By creating its own chips, the company aims to improve efficiency and gain more control over its expanding technology operations.

Broadcom CEO Hock Tan said the collaboration allows OpenAI to access cutting-edge compute capacity essential for building frontier AI models. “If you do your own chips, you control your destiny,” Tan noted.

The deal underscores Broadcom’s rising prominence in the AI chip market. Analysts indicate that Broadcom collaborates with other large customers such as Google, Meta, and ByteDance, which indicates its increasing involvement in custom chip technology. The stock of the company has increased by 40% this year, following more than a doubling in growth in 2024 to an over 1.5 trillion value.

Now that OpenAI and Broadcom collaborate, the transaction will increase the computing potential around the world and ensure the speed, effectiveness, and cost-effectiveness of digital services.