Broadcom surges after OpenAI deal for 10 gigawatts of custom AI accelerators

[Broadcom headquarters in San Jose, California, United States]
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Shares of Broadcom (NASDAQ:AVGO [https://seekingalpha.com/symbol/AVGO]) jumped about 12% premarket on Monday after OpenAI (OPENAI [https://seekingalpha.com/symbol/OPENAI]) and the chipmaker announced a collaboration for 10 gigawatts of custom AI accelerators.

OpenAI will design [https://openai.com/index/openai-and-broadcom-announce-strategic-collaboration/] the accelerators and systems, which will be developed and deployed in partnership with Broadcom.

Microsoft (NASDAQ:MSFT [https://seekingalpha.com/symbol/MSFT])-backed OpenAI said that by designing its own chips and systems, it can embed what it’s learned from developing frontier models and products directly into the hardware, unlocking new levels of capability and intelligence.

The racks, scaled entirely with Ethernet and other connectivity solutions from Broadcom, will meet surging global demand for AI, with deployments across OpenAI’s facilities and partner data centers, according to the companies.

The two companies will co-develop systems that include accelerators and Ethernet solutions from Broadcom for scale-up and scale-out.

OpenAI and Broadcom have long-standing agreements on the co-development and supply of the AI accelerators. The two have signed a term sheet to deploy racks incorporating the AI accelerators and Broadcom networking solutions.

Broadcom plans to deploy racks of AI accelerator and network systems targeted to start in the second half of 2026 and to be completed by the end of 2029.

“Developing our own accelerators adds to the broader ecosystem of partners all building the capacity required to push the frontier of AI to provide benefits to all humanity," said OpenAI's Co-Founder and CEO Sam Altman.

OpenAI said it has grown to over 800 million weekly active users and strong adoption across global enterprises, small businesses, and developers. The startup noted the collaboration will help OpenAI advance its mission to ensure that artificial general intelligence benefits all of humanity.

OpenAI has been signing deals with tech heavyweights to boost AI infrastructure. Last week, Advanced Micro Devices (AMD [https://seekingalpha.com/symbol/AMD]) signed a pact with OpenAI (OPENAI [https://seekingalpha.com/symbol/OPENAI]) to roll out AI infrastructure under a deal that is expected to deliver tens of billions of dollars in revenue for AMD. Shares of AMD surged about 27% on Oct. 6.

Last month, Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]) said it plans to invest up to $100B in OpenAI progressively to build and deploy at least 10 gigawatts of AI data centers with Nvidia systems.

_Update: The story was updated with more information._

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