In a move that could shake up the AI chip landscape, OpenAI, the creator of ChatGPT, is building its own custom-designed chip. This initiative is aimed at reducing dependency on existing suppliers like Nvidia, known for dominating the AI chip market. OpenAI has partnered with several industry giants to make this happen: Broadcom, AMD, and Taiwan Semiconductor Manufacturing Co. (TSMC).
Broadcom is playing a key role in developing the chip, focusing on its “inference” capabilities. This means the chip will be optimized for applying AI models to real-world data to make decisions. As demand for inference chips surges, OpenAI’s custom-built chip could eventually support a wider range of applications, complementing its reliance on Nvidia’s training chips.
To ensure smooth production, OpenAI has secured access to manufacturing capacity with TSMC, a leading chip foundry. Sources indicate the first custom-designed chip is slated for release in 2026.
Adding to this strategic move, OpenAI is also collaborating with AMD. Through Microsoft Azure, OpenAI will utilize AMD’s powerful MI300X chips for its AI workloads.
This news sent ripples through the market, with stocks of Broadcom, AMD, and TSMC experiencing gains. Wall Street analysts are also bullish on these companies. JPMorgan analyst Harlan Sur sees semiconductors as a top investment area for 2024, expecting a strong rebound after a challenging 2023. He specifically highlighted Broadcom and Marvell as key players poised for growth in cloud infrastructure and custom AI chips.
Similarly, Goldman Sachs analysts are optimistic about AMD’s prospects, citing the ongoing expansion of AI infrastructure spending across various industries as a key driver. The analysts see this as an “AI arms race” where companies are aggressively investing in AI technologies.
OpenAI’s development of its own AI chip represents a significant shift in the industry. By taking control of its hardware, OpenAI aims to optimize AI performance and reduce its reliance on third-party suppliers. This could potentially create a new competitive landscape and potentially open doors for wider adoption of AI in various sectors.
