OpenAI’s Announces Major Chip Deal with Broadcom

Key Takeaways

OpenAI and Broadcom are teaming up. They announced a plan to roll out 10 gigawatts of custom AI chips over the next four years. Here to put the news into context is Ana Gardez, our cloud and compute reporter here at the information. Ana, it's a busy morning. How you doing? >> I'm doing well. Happy to be here. Aos, >> so let's talk about another chip deal that that OpenAI has done with another chip company. Give us the details of what we know and then we'll talk about the bigger picture here. This morning, OpenAI and Broadcom announced a a major partnership um to deploy 10 gigawatts of custom AI chips for OpenAI. And it was broadly known within the industry that OpenAI was working with Broadcom on its own chip effort um to help reduce its reliance on Nvidia. But I think you know the publicly the the company's publicly talking about it today and putting a figure on it 10 gigawatts over four years really shows how serious the two companies are and you know OpenAI does need to raise a lot of money for this effort. So, I think we should expect maybe, you know, the next couple Mondays we might be on TITV talking about them. >> And it's kind of funny because over the last couple weeks, as we've seen OpenAI do a deal with Nvidia or Nvidia announcing its its letter of intent to invest more money into OpenAI, then we saw the OpenAI AMD deal. I mean, the question that we kept asking folks is, well, what does this mean for OpenAI's own chip efforts? Because we knew that they were going to be working on their own chip. And I guess this is sort of the the closest look we've had at saying, "Yeah, we're doing it." And and we're we're doing it in a big way with Broadcom as well, >> right? I mean, 10 gigawatts really isn't a joke and and that's the exact amount of the, you know, strategic partnership between OpenAI and Nvidia. Of course, OpenAI expects to get Nvidia chips through other deals, but you know, given that this now internal chip effort is the same size as the strategic partnership, I think it really puts into context how much OpenAI does not want to be reliant on one company or even two companies. They they sort of want many companies helping them reach their comput goals. >> And Jensen can't be happy about that. >> My guess is is not really, especially given the way that this was announced today. Um I I think the main takeaway was that you know OpenAI and Broadcom are not just working on a chip. They're working on the entire data center system including networking and other things you need to run run a system. And that is sort of Nvidia's pitch. They they always say that we do more than just building a chip. And so today that is kind of what Broadcom announced as well. And this is one of the things that we've talked about on the show is that Broadcom has sort of some of those products that help build out sort of that full uh data center infrastructure. It's not just the chip itself. >> Exactly. And and I think that's probably why OpenAI was drawn to a partner like Broadcom. Of course, we'll have to see how this all shakes out. We haven't really seen any examples of these Broadcom chips in action yet. So, um you know, with all these announcements, we're going to have to see what happens. But the intent is very clear, >> right? as you're looking for this story to develop further, what are you watching for? >> Well, well, one thing that we noticed this morning was um Broadcom's president um was on TV this morning talking with Greg Brockman and he was asked the question, "Oh, well, is this your $10 billion customer that CEO Hawk Tan talked about on the last earnings call and he kind of made it seem like OpenAI was not that $10 billion customer?" So, definitely one of the big questions today is uh is that true? And and who is a $10 billion customer? Because Broadcom might have another relationship that they aren't publicly talking about. That is still going to be important. >> Right. Well, Ana, thank you so much for coming on short notice. That is the beauty of breaking news. We look forward to having you back on as we see more of the developments in this story playing out. That is Ana Gardez, our cloud and compute reporter here at the on TITV.