Broadcom (AVGO) is reportedly assisting ChatGPT parent company OpenAI in designing and manufacturing its first artificial intelligence chip. This partnership will help Broadcom challenge NVIDIA's (NVDA) dominance in the field of artificial intelligence. Broadcom released its fiscal 2025 third-quarter results last night, which saw record quarterly revenue and better-than-expected results; its shares rose 10% in pre-market trading, driven by both positive results and news of its partnership with OpenAI.
Broadcom disclosed an unnamed new important customer last night, and related speculation also boosted its share price. The Financial Times quoted "people familiar with the matter" as saying that the customer that Broadcom CEO Hock Tan mentioned in a conference call last night and promised to place a $10 billion order was OpenAI. Citigroup analysts also said in a report that they believe the customer is OpenAI.
Broadcom and OpenAI did not immediately respond to requests for comment.
According to reports, OpenAI will initially use this new chip for internal business, and the chip is expected to begin delivery next year. OpenAI currently uses NVIDIA chips. This time it cooperates with Broadcom to develop self-developed chips. It is following in the footsteps of large technology companies such as Meta Platforms (META), Amazon (AMZN) and Alphabet (GOOGL) - these companies have started self-research of artificial intelligence chips.
Following the financial reports released by Nvidia (NVDA) last week and Advanced Micro Devices (AMD) last month, Broadcom's quarterly results once again confirmed the market's continued demand for artificial intelligence hardware.
Broadcom’s stock price has risen more than 30% this year.