Broadcom (AVGO) is reportedly collaborating with OpenAI to design its first-ever AI chip, positioning itself to challenge Nvidia’s (NVDA) dominance in the AI sector. This partnership comes as Broadcom disclosed a significant new customer, believed to be OpenAI, which committed to $10 billion in orders. Following a strong fiscal Q3 performance, which exceeded estimates with record revenue, Broadcom’s shares surged by 10% in premarket trading. The new AI chip will initially serve OpenAI’s internal needs, with shipments expected to begin next year. This aligns OpenAI with tech giants like Meta Platforms (META), Amazon (AMZN), and Alphabet (GOOGL), which are also developing in-house AI chips. Broadcom’s recent results indicate sustained demand for AI hardware, corroborating trends seen in earnings reports from Nvidia and Advanced Micro Devices (AMD). Overall, Broadcom’s shares have risen over 30% year-to-date, reflecting investor confidence in its growth potential in the AI market.
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