This article first appeared on GuruFocus.
Oct 13 – Broadcom (NASDAQ:AVGO) climbed more than 10% on Monday morning after joining hands with OpenAI on a multi-year plan to build 10 gigawatts of custom AI accelerators.
The two companies will jointly design and produce next-generation hardware for OpenAI’s data centers. OpenAI will handle chip design, while Broadcom will supply networking and connectivity gear using its Ethernet technology. The large-scale rollout is scheduled to start in the second half of 2026, with full deployment expected by 2029.
The collaboration is aimed at strengthening OpenAI’s computing backbone as the company expands the training and deployment of advanced AI models. Creating in-house accelerators allows OpenAI to weave learnings from its own systems into the hardware, potentially improving performance and energy use.
Broadcom executives said the partnership highlights the role of Ethernet in scaling AI infrastructure. OpenAI chief executive Sam Altman described the effort as an important move toward building the capacity needed to advance artificial intelligence responsibly.
Broadcom’s stock hovered near its session peak following the announcement, adding momentum to recent semiconductor sector gains.