OpenAI, the company behind ChatGPT, announced on Monday a partnership with chip maker Broadcom to design and develop its own specialized computer processors for artificial intelligence.
This collaboration is the latest in a string of recent moves by OpenAI as it seeks to solidify its position at the forefront of the generative AI revolution that began with ChatGPT’s launch in November 2022.
The companies stated that the new partnership, set to launch next year, will provide 10 gigawatts of computing power roughly equivalent to the energy required to power a major city.
In recent weeks, under CEO Sam Altman, OpenAI has inked major deals with Nvidia, AMD, Oracle, and South Korea’s Samsung and SK Hynix, focusing on investments in data centers and AI chips.
These partnerships come despite the fact that the AI business shows no clear signs of profitability yet, even with strong growth and high investor interest.
Experts warn that the massive infrastructure demands of AI, including chips and data centers, could strain electricity providers, as they require substantial power and resources to deliver the necessary computing capacity.
The financial terms of the deal with Broadcom were not part of the announcement and remain unclear for many of the recent deals involving OpenAI.
That has drawn some skepticism from observers who worry the AI frenzy may have created a financial bubble, posing a risk to investors and echoing the build up and subsequent crash of the late 1990s dotcom boom.
Still, shares in Broadcom rose nearly ten percent on the news, reflecting stock price surges from AMD and Oracle following their own deals with OpenAI, which is the world’s most valuable privately held company.
By designing its own chips rather than relying on off-the-shelf processors, OpenAI says it can build hardware specifically tailored to how its AI models work, potentially making them faster and more powerful.
“Partnering with Broadcom is a critical step in building the infrastructure needed to unlock AI’s potential and deliver real benefits for people and businesses,” said Altman, OpenAI’s co-founder and chief executive.
The custom processors will be installed in data centers operated by OpenAI and its partners to keep up with soaring worldwide demand for AI services.
OpenAI has grown rapidly to more than 800 million people using its services weekly since its 2022 launch, making ChatGPT the fastest-growing consumer app ever.
Broadcom, which will manufacture and help develop the chips, called the collaboration “a pivotal moment” in AI development.
