OpenAI is preparing to manufacture its own artificial intelligence (AI) chips next year, according to widespread industry reports. The Financial Times revealed that the company’s custom chip is being designed in partnership with semiconductor giant Broadcom. While Broadcom did not name its client directly, it disclosed that an unnamed company had already placed orders worth around US$10 billion. Market analysts believe the customer in question is OpenAI, and the announcement drove Broadcom’s shares higher over the weekend.
The move is seen as a significant step in OpenAI’s strategy to strengthen its technological independence. By securing access to custom hardware, the company aims to support the growing demand for its flagship product, ChatGPT, which has surged in popularity worldwide.
Reducing reliance on NVIDIA
At present, the AI chip market is dominated by NVIDIA, whose graphics processing units (GPUs) power the majority of machine learning and generative AI systems. However, the soaring demand for high-performance chips has created supply pressures across the industry. By developing its own processors, OpenAI intends to expand its computing power while reducing dependency on NVIDIA’s hardware.
Reports suggest that OpenAI plans to double its computing capacity within the next five months. Analysts argue that in-house chips could help the company achieve this ambitious goal by offering more flexibility, better performance, and potentially lower long-term costs.
Industry observers note that reliance on a single supplier, even one as established as NVIDIA, leaves companies vulnerable to price fluctuations and supply shortages. For OpenAI, the ability to control its own chip production is expected to provide both greater stability and a competitive edge in the increasingly crowded AI sector.
Part of a broader industry trend
OpenAI’s decision follows a growing trend among major technology companies. Firms such as Amazon Web Services, Google, Meta, and Microsoft have already invested in designing custom processors tailored to their AI and cloud computing needs. By building chips optimised for their own platforms, these companies have improved efficiency and reduced operational costs.
Experts say OpenAI’s move into hardware is a natural progression as the company scales its AI services. With ChatGPT continuing to attract millions of users globally, the demand for computational resources is only expected to rise. By investing in dedicated chips, OpenAI is positioning itself to meet future requirements and remain competitive against other AI leaders.
While the company has not officially commented on the Financial Times report, industry insiders suggest the partnership with Broadcom could mark the beginning of a long-term strategy to secure OpenAI’s place in the AI ecosystem. If successful, the initiative could reshape the balance of power in the AI hardware market, challenging NVIDIA’s dominance and opening the door for broader competition.
