In a move that could reshape the AI hardware landscape, Broadcom Inc. has partnered with OpenAI to design and produce artificial intelligence accelerator chips starting in 2026. This places Broadcom in direct competition with Nvidia Corp., which currently dominates the AI chip market.
$10 Billion Orders Already Secured
Broadcom CEO Hock Tan revealed that the company has secured over $10 billion in production orders from a new customer, later identified as OpenAI. The first batch of chips is expected to ship next year, with initial use focused on OpenAI’s internal operations, according to the Financial Times.
Stock Market Reaction
News of the partnership sparked a major rally in Broadcom’s shares, which surged 16% in New York trading, adding more than $200 billion to its market value—the biggest gain since April. In contrast, Nvidia’s stock fell 4.3%, marking its sharpest intraday drop since May.
AI Revenue Outlook Brightens
Tan highlighted that Broadcom’s AI-related revenue is set to grow significantly in fiscal 2026, beyond earlier projections of 50–60% growth. The company reported $5.2 billion in AI semiconductor sales last quarter and expects this figure to rise to $6.2 billion in the fourth quarter.
Strategic Positioning in the AI Boom
While Nvidia continues to lead the AI chip sector, Broadcom is emerging as a key custom semiconductor supplier for firms seeking chips tailored for AI workloads. Alongside AI accelerators, Broadcom is also upgrading its networking equipment to handle the enormous data transfer demands of AI data centers.
Hock Tan Extends Leadership
Adding to investor confidence, Tan announced that he will remain Broadcom’s CEO until at least 2030, ensuring continuity in leadership as the company aggressively scales its AI strategy.
