Broadcom Seeks More Than $50 Billion in Funding for OpenAI's AI Chips — WSJ

Chipmaker Broadcom is working to secure more than $50 billion in financing to purchase custom AI chips from OpenAI that the companies are developing jointly, according to The Wall Street Journal (WSJ), which cites sources familiar with the negotiations.

Among the creditors with whom Broadcom has discussed participation in the deal are Apollo and Blackstone, according to sources cited by the newspaper, who emphasize, however, that these talks are in the early stages and the size of the deal could ultimately change.

The new funding that Broadcom is arranging for OpenAI could cover several gigawatts of computing power on OpenAI chips, one of the publication’s sources said. The deal is expected to close by the end of the year. OpenAI’s chip development program, known internally at the AI lab as Nexus, includes custom chips named after varieties of peppers: the first and second generations were named Jalapeño and Serrano.

The financing deal is expected to take place one year after OpenAI and Broadcom announced a partnership under which they will jointly develop custom OpenAI chips with a total capacity of 10 GW using Broadcom’s networking technologies, the WSJ reports. The companies have stated that they plan to deploy these systems from the second half of 2026 through the end of 2029.

This information emerged amid reports that SpaceX had been discussing a $40 billion financing deal with creditors to purchase Nvidia chips (sources at the Financial Times reported this the day before, and sources at Bloomberg and the WSJ confirmed it). In addition, Oracle is currently conducting separate negotiations with Apollo and Goldman Sachs to raise funds for a major chip purchase, according to sources familiar with the matter who spoke to The Wall Street Journal.

This wave of fundraising deals reflects the rising cost of building AI infrastructure, the newspaper notes. Cloud providers, such as Amazon Web Services and Oracle, have traditionally financed their purchases of computing equipment using their own cash flow. To develop AI infrastructure, these companies have issued hundreds of billions of dollars in bonds. However, some buyers are now turning to Wall Street investment firms to finance purchases worth tens of billions of dollars per deal, the publication explains.

In addition, a new group of chip buyers has emerged—such as OpenAI and Anthropic—that lack the financial resources to purchase equipment on their own. Leading AI labs have historically leased most of their computing power from cloud providers, but now they want to own most of their own infrastructure to reduce costs and minimize their dependence on other companies.

This article is being updated

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