Broadcom Shares Surge After 10GW AI Chip Partnership with OpenAI
Broadcom Inc. (NASDAQ: AVGO) shares surged 12% on Monday morning after the company announced a strategic multi-year partnership with OpenAI to develop and deploy 10 gigawatts (GW) of custom AI accelerators.
Under the agreement, OpenAI will design the AI processors, while Broadcom will handle development, networking integration, and large-scale deployment. The companies have signed a term sheet outlining plans to roll out AI accelerator racks that incorporate Broadcom’s Ethernet and connectivity technologies. Deployment is set to begin in the second half of 2026 and complete by the end of 2029.
“Broadcom’s collaboration with OpenAI marks a pivotal step in advancing artificial general intelligence,” said Hock Tan, President and CEO of Broadcom. “OpenAI has led the AI revolution since the launch of ChatGPT, and we’re excited to co-develop and deploy 10 gigawatts of next-generation AI accelerators and networking systems that will define the future of computing.”
The deal strengthens Broadcom’s leadership in AI infrastructure, spotlighting the growing importance of custom AI accelerators and Ethernet-based networking solutions in modern AI data centers. The new racks will integrate Broadcom’s full suite of Ethernet, PCIe, and optical connectivity products, designed to enhance efficiency and scalability for AI workloads.
OpenAI CEO Sam Altman described the collaboration as “a critical step toward building the infrastructure needed to unlock AI’s full potential.” By designing its own chips, OpenAI aims to embed insights gained from developing frontier AI models directly into its hardware systems.
The company, which now reports over 800 million weekly active users, plans to deploy the new AI systems across its own facilities and partner data centers to meet rising global demand for computing power. The move also underscores OpenAI’s ambition to reduce dependency on third-party chip suppliers like Nvidia and AMD, while expanding its role in the AI hardware ecosystem.
