Broadcom said it is developing AI processors with OpenAI. Shares soared

OpenAI, which created artificial intelligence ChatGPT, and chipmaker Broadcom said that they will jointly develop, produce and deploy processors for artificial intelligence with a combined capacity of 10 gigawatts. The two companies said in a joint statement.

Under the terms of the agreement, OpenAI will develop AI gas pedals and related systems to be manufactured and commissioned with Broadcom. It is about creating OpenAI's first proprietary processor for artificial intelligence, Reuters noted. Through the development of its chips and systems, OpenAI can "incorporate the knowledge gained in the development of AI models and related products directly into hardware, opening up "new levels of capability and intelligence," the companies said.

The financial terms of the partnership are not disclosed. It remains unclear how exactly OpenAI will finance the deal, Reuters writes. The capacity of 10 gigawatts corresponds to the electricity demand of more than 8 million US households, the agency explained.

Broadcom shares jumped more than 9% immediately after the opening of the main tors in the US. During the pre-market, the price after the publication of the companies' announcement added almost 12%.

The announcement comes a month after Broadcom shares rose sharply due to the disclosure of information about the company's customer with a $10 billion contract, CNBC writes. Analysts speculated even then that this customer was OpenAI. Now the companies have officially announced the partnership, the channel added.

In recent weeks, OpenAI has also entered into major agreements with Nvidia, Oracle and Advanced Micro Devices (AMD) in a bid to secure capital and computing power for its ambitious artificial intelligence plans.

"These projects have become so complex that now you have to cover the whole chain," said OpenAI CEO Sam Altman in a podcast with OpenAI and Broadcom executives released at the same time the two companies announced their collaboration.

OpenAI's $100 billion deal with Nvidia worried analysts on Wall Street. They saw it as a sign of a possible bubble and a bad sign for Nvidia, as it would essentially give OpenAI money that it would use to buy equipment from Nvidia itself. This reminded analysts of the practices of the dot-com bubble and also raised doubts about the deal's compliance with antitrust regulations.

This article was AI-translated and verified by a human editor