OpenAI-Broadcom agreement sends shares of chipmaker soaring (sg.finance.yahoo.com)

OpenAI has struck a major pact with Broadcom for custom chips and networking components to help power its AI services, a deal that sent Broadcom shares up roughly 10% and added about $150 billion to its market value. The agreement joins earlier massive OpenAI arrangements with Nvidia and AMD and is intended to support roughly 10 GW of AI data‑centre capacity (roughly the peak energy demand of New York City). Deployment of racks with Broadcom’s custom gear is slated to begin in H2 2026 and finish by end‑2029; unlike the Nvidia/AMD deals, Broadcom won’t take an equity stake and will supply hardware to OpenAI or its cloud partners rather than provide capacity itself. Technically and strategically the pact matters because it gives OpenAI the ability to co‑design silicon and networking across the full stack—from transistors up—to squeeze efficiency, lower inference costs and boost model performance. At current market prices a single GW of AI chips runs on the order of $35 billion, so scale is extremely capital‑intensive and raises questions about financing and a potential AI‑spending bubble. For Broadcom, the deal marks a stronger foothold against Nvidia’s processor dominance (Broadcom’s Ethernet options compete with Nvidia’s proprietary tech). The partnership also complements OpenAI’s own chip efforts, signaling an industry shift toward bespoke hardware + networking combos as a practical path to cheaper, faster AI at massive scale.