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Broadcom became the latest chipmaker to forge a blockbuster data centre deal with OpenAI, triggering a rally that added more than US$150 billion to its market value.
In a pact announced on Monday, OpenAI agreed to buy custom chips and networking components from Broadcom to help power its artificial intelligence services. OpenAI had already struck deals for data centres and chips that easily top US$1 trillion, and the company plans to spend tens of billions of dollars more on Broadcom chips, according to people familiar with the matter.
The agreement, which follows OpenAI’s deals with Nvidia and Advanced Micro Devices (AMD), is meant to add 10 gigawatts (GW) worth of AI data centre capacity – a level equivalent to the peak energy demand of New York City.
The wrinkle with the Broadcom pact is it will let OpenAI tailor the chips to meet specific needs. The start-up said it would unlock “new levels of capability and intelligence” by applying lessons gleaned from developing AI models to hardware technology.
For Broadcom, the move provides deeper access to the booming AI market. Though the company has already seen its revenue from AI computing climb, Broadcom has remained in the shadow of Nvidia, the dominant seller of AI processors.
