OpenAI To Mass-Produce 1st Proprietary AI Chip With Broadcom, Secures $10 Billion Deal: Report

Kaustubh Bagalkote

September 04, 2025

OpenAI is set to begin mass production of its first proprietary artificial intelligence chip next year through a partnership with Broadcom Inc. (NASDAQ:AVGO), marking a strategic shift away from its reliance on Nvidia Corp. (NASDAQ:NVDA) amid surging demand for artificial intelligence computing power.

Broadcom Secures $10 Billion Customer Deal

Broadcom CEO Hock Tan confirmed during Thursday’s earnings call that the semiconductor giant secured a fourth major customer committing to $10 billion in orders. The Financial Times sources identified OpenAI as the new client.

The deal delivered “immediate and fairly substantial demand” that will boost chip shipments “pretty strongly” starting next year, according to Tan.

Broadcom’s shares jumped 4.58% to $306.10 in after-market trading following the positive earnings report.

OpenAI and Broadcom did not immediately respond to Benzinga's request for comment.

Strategic Move Toward Computing Independence

OpenAI’s custom chip initiative follows the playbook of tech giants including Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG), Amazon.com Inc. (NASDAQ:AMZN) and Meta Platforms Inc. (NASDAQ:META), which have developed specialized processors to handle AI workloads more efficiently than standard graphics processing units.

The partnership began last year, but the timeline for mass production remained unclear until this week’s announcement. OpenAI plans to use the chips internally rather than making them available to external customers, according to the FT report, addressing its massive compute requirements for ChatGPT’s 700 million weekly users.

See Also: Mitch McConnell Says Trump Tariffs-Ushered Era Has ';Similarities’ With The 1930s: ';This Is The Most Dangerous Period Since Before World War Two’

Market Impact on AI Infrastructure

The custom chip development signals a potential shift in the AI hardware landscape, where Nvidia has maintained dominance. According to FT, HSBC analysts expect custom chip businesses to achieve higher growth rates than Nvidia’s GPU business by 2026.

OpenAI CEO Sam Altman recently emphasized the company’s compute priorities, stating plans to double its compute fleet over the next five months to meet increased demand from the upcoming GPT-5 model.

The development comes as OpenAI reportedly moves forward with a $10.3 billion secondary share sale at a $500 billion valuation, up from its previous $300 billion valuation established in April.

Read Next:

Google Services Crash: Gmail, YouTube, Maps Reportedly Experience Major Outages Across Eastern Europe, US Cities

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: Meir Chaimowitz on Shutterstock.com

Recommended

Is This Elon's Worst Nightmare? - Ad

The Next Palantir Moment Could Be Here - Ad

Chase, Bank of America, Wells Fargo Preparing for Big Change - Ad

The FBI has issued a warning about a sophisticated multi-phase scam known as the "Phantom Hacker."

Takeaways from a hunt for 'secret' fresh water under the North Atlantic seabed

ABOARD LIFTBOAT ROBERT, North Atlantic (AP) — It turns out the Continental Shelf has been holding a secret from the ages. Beneath the sea floor off the U.S. northeast lies an enormous reserve of fresh water whose existence was long unknown, then was suspected and now is confirmed.

From Ore to Gold Bars-This Nevada Mine Is Already Producing

From Ore to Gold Bars-This Nevada Mine Is Already Producing - Ad

Most juniors explore...Few actually produce. This one's already pouring gold thanks to infrastructure that would cost tens of millions to build today. With major land holdings and room to scale, it's one to watch. Discover the little known gold company that's already producing.

BrilliA Inc Soars Over 87% After Hours Following Cash Dividend Announcement

BrilliA Inc. shares soared 86.73% in after-hours trading Wednesday after announcing a cash dividend.

Ukrainian Drone Sparks Blazes Just Miles From Putin's Mysterious $1.5B Black Sea Palace

A Ukrainian drone strike has ignited widespread forest fires in close proximity to Russian President Vladimir Putin's opulent Black Sea residence, colloquially known as "Putin's Palace".

White House Insider Buck Sexton: "Trump's Next Move Will Shock the World"

White House Insider Buck Sexton: "Trump's Next Move Will Shock the World" - Ad

It could single-handedly reshape the global order... dramatically increase U.S. power... and trigger a massive American market boom the likes of which we haven't seen in 75 years.

Jim Cramer Expects Palantir To Reach New All-Time High

Market analysts and financial commentators provide crucial guidance in the volatile investment landscape. Cramer says no to VKTX, but expects PLTR to go up.

Powerball Jackpot Soars To $1.1 Billion After No Winning Tickets, 5th Largest In History

The Powerball jackpot has reached $1.1 billion after no winner in Saturday's drawing, with nine tickets earning $1 million.

The AI Blind Spot in Banking

The AI Blind Spot in Banking - Ad

Banks thought AI would solve compliance. Instead, it's made the problem worse. One breakthrough platform is cutting costs in half while securing every flow.

California crew arrested for hundreds of Home Depot thefts worth $10M, police say

VENTURA COUNTY, Calif. (AP) — Southern California authorities say they uncovered a criminal ring that stole $10 million in merchandise from Home Depot over several years, including 600 thefts this year alone, which the company calls the largest organized retail theft in its history.

780,000 pressure washers are under recall after some consumers report explosions and impact injuries

NEW YORK (AP) — About 780,000 pressure washers sold at retailers like Home Depot are being recalled across the U.S. and Canada, due to a projectile hazard that has resulted in fractures and other injuries among some consumers.

Analysts Project This Stock Could Jump to $14 a Share. You Can Still Invest for $3.50.

Analysts Project This Stock Could Jump to $14 a Share. You Can Still Invest for $3.50. - Ad

The AI company making heart disease easier to detect is offering investors $3.50 investment units that include one convertible preferred share and one warrant, providing investors with access to 2 common shares. Based on analyst 1- year projections, that amounts to a near-term 500% return potential.

Marjorie Taylor Greene Put Money In BlackRock's Bitcoin ETF This Year — Here's How Her Returns Stack Up Against Others In Congress

Rep. Marjorie Taylor Greene (R-Ga.) has added considerable Bitcoin (CRYPTO: BTC) exposure to her investment portfolio in 2025, making strategic purchases into iShares Bitcoin Trust ETF (NASDAQ:IBIT).

Nestlé dismisses CEO due to an inappropriate relationship with a subordinate

Swiss food giant Nestlé said Monday it dismissed its CEO Laurent Freixe due to an inappropriate relationship with a subordinate.

How "Trump's New Dollar" Could Impact Your Wealth

How "Trump's New Dollar" Could Impact Your Wealth - Ad

If you have any money in U.S. dollars... learn how to prepare for "Trump's new dollar"... Because this could be the biggest change to our financial system in 54 years. President Trump even called it: "The greatest revolution in financial technology since the birth of the internet itself."

US immigration officers raid Georgia site where Hyundai makes electric vehicles

SAVANNAH, Ga. (AP) — U.S. authorities on Thursday raided the sprawling site where in southeast Georgia, shutting down construction on an adjacent factory being built to produce EV batteries.

Social Security whistleblower who claims DOGE mishandled Americans' sensitive data resigns from post

WASHINGTON (AP) — A Social Security official who has filed a whistleblower complaint alleging the Department of Government Efficiency officials Americans' sensitive information says he's resigning his post because of actions taken against him since making his complaint.

This Gold Miner Has the Map, the Metal, and the Momentum

This Gold Miner Has the Map, the Metal, and the Momentum - Ad

JPMorgan is forecasting that gold will push past $4,000, and this Nevada operation is positioned to benefit. Historical estimates show its property could hold around 1.8 million ounces of measured and indicated gold, backed by infrastructure and billionaire investors. The company's already producing, refining gold onsite and looking to expand. That's not a dream-stage story-that's a head start.

US firm agrees $500 million investment deal with Pakistan for critical minerals

ISLAMABAD (AP) — A U.S. metals company signed a $500 million investment deal with Pakistan on Monday.

More than 60 containers fall off ship in Long Beach port

LOS ANGELES (AP) — More than 60 containers toppled off a cargo ship Tuesday morning in the Port of Long Beach, tumbling overboard and floating in the water.

The Tesla Shock Nobody Sees Coming

The Tesla Shock Nobody Sees Coming - Ad

While headlines scream "Tesla is doomed"...Jeff Brown has uncovered a revolutionary AI breakthrough buried inside Tesla's labs. One that is helping AI escape from our computer screens and manifest itself here in the real world all while creating a 25,000% growth market explosion starting as early as October 23rd.

Kevin O'Leary Once Revealed How Steve Jobs's Obsession With Fonts Spawned A Classroom Blockbuster And Taught Him A Key Business Lesson

Kevin O'Leary says Steve Jobs's obsession with fonts not only turned The Oregon Trail into a classroom blockbuster but also taught him a lasting business lesson about blending art, science and persuasion.

Trump Claims India Is Now Offering To Cut Its Tariffs To 'Nothing,' But Says It's Too Late — 'Should Have Done So Years Ago'

President Donald Trump criticized the longstanding trade dynamic between India and the United States, while signaling a potential breakthrough in trade negotiations with the South Asian country.

Is This Elon's Worst Nightmare?

Is This Elon's Worst Nightmare? - Ad

Elon's empire looks doomed - crashing sales, lost tax credits, and media backlash. But behind the scenes, Tesla is about to unleash a breakthrough Forbes calls a "multi-trillion-dollar opportunity." It's not the end - it's the start of a 25,000% AI comeback.

Asian shares are mostly up after US stocks inch to more records as inflation slows and Oracle soars

MANILA, Philippines (AP) — Asian shares were mostly higher Thursday, buoyed by gains of tech-related stocks after Wall Street inched to more records following a surprisingly encouraging report on inflation and a stunning forecast for growth from Oracle because of the boom.

Robinhood Stock Surges Over 7% In Monday Pre-Market: What's Going On?

The stock of Robinhood Markets Inc. (NASDAQ: HOOD) surged 7.46% during the Monday pre-market trading session following Friday's news that it will be included in the S&P 500.

The Next Palantir Moment Could Be Here

The Next Palantir Moment Could Be Here - Ad

A $21M market cap company is landing multimillion-dollar contracts with banks and governments. With only 9.7M shares in the float, scarcity could spark explosive moves.

CBS News' new ombudsman has background and duties that differ from the job's traditional definition

NEW YORK (AP) — CBS News has a new ombudsman assigned to look into public complaints, but the job being assumed by Kenneth Weinstein bears little resemblance to how this watchdog role has traditionally operated in journalism.

What happens to Trump’s tariffs now that a federal appeals court has knocked them down?

WASHINGTON (AP) — President Donald Trump has audaciously claimed virtually unlimited power to bypass Congress and impose sweeping taxes on foreign products.

Chase, Bank of America, Wells Fargo Preparing for Big Change

Chase, Bank of America, Wells Fargo Preparing for Big Change - Ad

Do you have money in any of these banks? Chase. Bank of America. Citigroup. Wells Fargo. U.S. Bancorp. They're preparing for what could be the biggest change to our financial system in 54 years. This could have a huge impact on your wealth.

Trump-Backed World Liberty Sinks As Billionaire Justin Sun Protests, Then Reinvests

Justin Sun clashed with Trump-linked World Liberty over frozen $WLFI tokens before reversing course Friday with a fresh $20M investment.

Federal government sues California utility, alleging equipment sparked deadly wildfires

LOS ANGELES (AP) — The federal government filed two lawsuits Thursday against Southern California Edison, alleging the utility's equipment sparked fires including January's Eaton Fire in the Los Angeles area, which destroyed more than 9,400 structures and killed 17 people.

From Ore to Gold Bars-This Nevada Mine Is Already Producing

From Ore to Gold Bars-This Nevada Mine Is Already Producing - Ad

Israel launches a satellite to expand its surveillance capability throughout Middle East

JERUSALEM (AP) — Israel has launched a new spy satellite that defense officials described as a strategic cornerstone, saying it will strengthen their surveillance capacity across the Middle East in the years ahead.

New Jersey's massive American Dream mall sued for selling clothes on a Sunday

On any given Sunday, in New Jersey allows visitors to hit an indoor ski slope, surf an artificial wave, ride roller coasters — or shop for a new outfit at dozens of big-name retail stores.

White House Insider Buck Sexton: "Trump's Next Move Will Shock the World"

White House Insider Buck Sexton: "Trump's Next Move Will Shock the World" - Ad

It could single-handedly reshape the global order... dramatically increase U.S. power... and trigger a massive American market boom the likes of which we haven't seen in 75 years.

Tesla China Sales Fall 10% To 57,152 Units In August, Marking 6th Decline In 2025

Tesla sales in China fell 9.93% in August amid lackluster global sales and Model Y L receiving 120,000 orders in China.

Trump's Tariffs, Wall Street's Fear Gauge And A Veteran Economist's Dire Warning: This Week In Economy

Markets kicked off September on shaky ground as tariffs, weak jobs data, and warnings of a global collapse rattled investor confidence and fueled volatility.

The AI Blind Spot in Banking

The AI Blind Spot in Banking - Ad

Banks thought AI would solve compliance. Instead, it's made the problem worse. One breakthrough platform is cutting costs in half while securing every flow.

Elon Musk in line for $1 trillion pay package if Tesla hits aggressive goals over next 10 years

could be in line for a payout of $1 trillion if his electric car company meets a series of extremely aggressive targets over the next 10 years, according to documents released by the company.

Trending Now