Broadcom soars after OpenAI pact for 10GW of AI chips

Investing.com -- Broadcom Inc. (NASDAQ:AVGO) stock surged 12% Monday morning following the announcement of a strategic collaboration with OpenAI to develop and deploy 10 gigawatts of custom AI accelerators.

The multi-year partnership will see OpenAI design the accelerators while Broadcom handles development and deployment. The companies have signed a term sheet for deploying racks incorporating the AI accelerators and Broadcom’s networking solutions, with deployment targeted to begin in the second half of 2026 and complete by the end of 2029.

"Broadcom’s collaboration with OpenAI signifies a pivotal moment in the pursuit of artificial general intelligence," said Hock Tan, President and CEO of Broadcom. "OpenAI has been in the forefront of the AI revolution since the ChatGPT moment, and we are thrilled to co-develop and deploy 10 gigawatts of next-generation accelerators and network systems to pave the way for the future of AI."

The partnership reinforces Broadcom’s position in the AI infrastructure market, particularly highlighting the importance of custom accelerators and Ethernet technology for networking in AI data centers. The racks will include Broadcom’s end-to-end portfolio of Ethernet, PCIe, and optical connectivity solutions.

Sam Altman, co-founder and CEO of OpenAI, noted that the partnership is "a critical step in building the infrastructure needed to unlock AI’s potential." By designing its own chips, OpenAI aims to embed what it has learned from developing frontier models directly into hardware.

OpenAI, which now boasts over 800 million weekly active users, will deploy these systems across its facilities and partner data centers to meet the growing global demand for AI computing power.

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