OpenAI is in talks with Broadcom to design a new AI chip in an effort to boost its computational power. According to a report from The Information, this partnership aligns with CEO Sam Altman’s broader goals to establish a company focused on AI chip production, which would include creating manufacturing facilities and data centers. The Vision Behind the Initiative OpenAI’s plans for a proprietary AI chip emerged last year, but not official details of development have been given. To accelerate AI development, Altman proposed a long-term goal to create a new entity dedicated to AI chip development. This would reduce reliance on current chip suppliers and provide hardware tailored to OpenAI’s specific requirements. The initiative now appears to be taking shape within OpenAI itself, rather than through a separate entity. This internal approach could streamline the process and lead to faster technological advancements. Industry Impact Working with Broadcom, a leading semiconductor manufacturer, could help OpenAI compete more effectively in the advanced AI sector. Custom chips designed for OpenAI’s needs could result in more efficient AI models. Sources indicate this move represents a strategic pivot for OpenAI, aligning its hardware capabilities with its AI ambitions. Such a partnership could impact both the AI and semiconductor markets, potentially setting new performance benchmarks for AI chips. Competition with Nvidia OpenAI aims to challenge Nvidia’s dominance in the AI chip market, where it holds an estimated 70% to 95% share. Nvidia’s success in AI has turned it into one of the world’s most valuable companies. OpenAI’s collaboration with Broadcom or the creation of its own chip fabrication plant seeks to lessen its dependence on Nvidia for AI processing chips. OpenAI’s partner, Microsoft, has already released its Cobalt and Maia AI chips. The Cobalt chips, based on the Arm architecture, feature 128 cores and are designed to enhance performance significantly. Companies such as Adobe and Snowflake are already utilizing these chips in their operations.