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Broadcom is reportedly planning to ship its first AI chips for OpenAI next year .
Broadcom is reportedly helping ChatGPT maker OpenAI design and make its first ever AI chip, challenging Nvidia’s dominance as an AI leader.
Reports also suggest that a big new customer Broadcom disclosed last night without identifying was OpenAI.
Shares in Broadcom, which posted fiscal third-quarter results that topped estimates Thursday, are soaring in early trading.
Broadcom (AVGO) is helping ChatGPT maker OpenAI design and make its first-ever AI chip, according to reports.
The partnership would help Broadcom challenge Nvidia’s (NVDA)Â dominance as an AI leader. Shares in Broadcom, which last night posted fiscal third-quarter results that topped estimates Thursday on record revenue, are soaring 15% in early trading Friday, lifted by the results and the OpenAI news.
Speculation about a big new customer the company disclosed last night without identifying it also helped the stock. The Financial Times, citing “people familiar with the matter,” said that OpenAI was the customer that committed to $10 billion in orders Broadcom CEO Hock Tan referred to during last night’s conference call. Citi analysts in a note also said they believe OpenAI was that customer.
Broadcom and OpenAI didn’t immediately respond to requests for comment.
OpenAI will initially use the new chip for its own internal purposes, the FT reported, with shipments beginning next year, according to the FT and Bloomberg. OpenAI, which currently uses chips from Nvidia, is following the path of other big tech firms like Meta Platforms (META), Amazon (AMZN), and Alphabet’s (GOOGL) in moving to create AI chips in-house.
Broadcom’s quarterly results are the latest to show sustained demand for AI hardware following earnings from Nvidia (NVDA) last week, and Advanced Micro Devices (AMD) last month.
The company’s shares have gained more than 50% so far this year.
UPDATE—This article has been updated with the latest share price information.
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