OpenAI unveils first chip as part of Broadcom deal in effort to 'build the full stack'

OpenAI and Broadcom on Wednesday unveiled their debut custom chip, called Jalapeño, marking the ChatGPT maker's first entry into artificial intelligence silicon.

The chips will be made by Broadcom and used by OpenAI for inference, the compute-intensive process of serving its AI models to users in ChatGPT and other applications. It's a major step in OpenAI's plan to "build the full stack behind its models and products," according to the press release.

"By designing more of the stack ourselves, we can serve more intelligence with greater efficiency and keep pushing advanced AI toward broader access," Greg Brockman, OpenAI's president, said in the statement.

Broadcom shares climbed about 2% following the announcement.

Since OpenAI kick-started the generative AI boom in 2022, the company has been one of the biggest buyers of Nvidia's pricey graphics processing units, the key piece of infrastructure for building AI models and running large workloads. But OpenAI is experiencing such an explosion in demand that it needs other sources of advanced silicon.

Earlier this year, OpenAI forged a deal with Amazon Web Services that includes use of the company's Trainium AI chips. OpenAI has also signed agreements with Nvidia rival Advanced Micro Devices and with AI chipmaker Cerebras, which held its initial public offering in May.