Chip stocks bounced back strongly yesterday, recovering their losses from Friday, mainly due to easing U.S.-China trade tensions and Broadcom’s major AI deal.

Semiconductor stocks have been the biggest beneficiaries of the AI boom, as these companies provide the “picks and shovels” for the AI gold rush.

Semiconductor ETFs are also among the best-performing ETFs of the past decade, as chips, the fundamental building blocks of computation, have become integral to everything from smartphones to cars, laptops, PCs, video games, and data centers.

Chip Megadeals: Bubble or Boom?

Nvidia ((NVDA Quick QuoteNVDA – Free Report) ) and OpenAI announced a strategic partnership under which Nvidia will invest up to $100 billion in OpenAI. The investment will support new data centers with a capacity of at least 10 gigawatts of power. The Trump administration has also approved some Nvidia chip exports to the UAE.

AMD ((AMD Quick QuoteAMD – Free Report) ) shares have surged recently after the chip designer announced a multibillion-dollar agreement with OpenAI on data centers that will use AMD chips. Under the deal, OpenAI will purchase six gigawatts’ worth of AMD chips and receive about a 10% equity stake in AMD, granted in phases upon reaching certain milestones.

AMD has long been viewed as a distant second in the AI chip market, which is dominated by Nvidia with more than a 75% market share.

OpenAI and Broadcom ((AVGO Quick QuoteAVGO – Free Report) ) also announced a partnership to develop and deploy 10 gigawatts of custom AI chips and computing systems over four years. Financial terms were not disclosed.

Intel ((INTC Quick QuoteINTC – Free Report) ), which lost its edge years ago to Taiwan Semiconductor Manufacturing Co. ((TSM Quick QuoteTSM – Free Report) ), received a boost as Nvidia invests $5 billion in Intel.

The investment follows the U.S. government’s 10% stake in Intel, now worth about 50% more due to the company’s stock rally. Both the Biden and Trump administrations have supported Intel to strengthen domestic chip manufacturing.

OpenAI estimates that one gigawatt of capacity costs about $50 billion to bring online, with roughly two-thirds of that spent on chips, hardware, and infrastructure, according to the Financial Times.

To learn more about these stocks, VanEck Semiconductor ETF ((SMH Quick QuoteSMH – Free Report) ), iShares Semiconductor ETF ((SOXX Quick QuoteSOXX – Free Report) ), and SPDR S&P Semiconductor ETF ((XSD Quick QuoteXSD – Free Report) ), please watch the short video above.