CNBC’s MacKenzie Sigalos reports on OpenAI’s new partnership with Broadcom to co-design and deploy custom AI chips — a multibillion-dollar deal that marks OpenAI’s biggest step yet into hardware.

Wall Street

Broadcom's stock rose sharply after the announcement of a significant partnership with OpenAI to co-design and deploy 10 gigawatts of custom AI accelerators tailored for OpenAI's models. This move positions OpenAI alongside other major technology firms, such as Google, in developing proprietary hardware and signals a shift away from reliance on off-the-shelf GPUs from companies like NVIDIA and AMD.

Unlike previous deals between OpenAI and chipmakers, this agreement does not involve any equity or investment components. The financial details remain undisclosed, but OpenAI is reportedly exploring debt financing and other creative financial structures to fund the large-scale hardware rollout. The deal establishes OpenAI as Broadcom's fifth major hyperscaler customer and has contributed to a broader rally in chip stocks.

Broadcom surges 10% on AI chip deal with OpenAI

McKenzie Sagal has got all the details on this one. McKenzie. Hey, Mel. So this is OpenAI locking in its hardware advantage, striking a blockbuster deal with Broadcom to co-design and deploy 10 gigawatts of custom AI accelerators, purpose-built for its own models, and set to roll out in the back half of 2026. It is a direct challenge to NVIDIA and AMD, moving beyond those off-the-shelf GPUs and into homegrown silicone. Now, Wall Street had speculated that OpenAI might be Broadcom's mystery $10 billion buyer disclosed in its latest quarterly earnings, but Broadcom's president told CNBC this morning that it's not. This deal is separate and now makes OpenAI Broadcom's fifth major hyperscaler customer. Chip stocks broadly rallying on that news. OpenAI's push into custom chips puts it in the same league as Google, which also co-designs chips with Broadcom. And remember, OpenAI is also getting into the business of building the infrastructure themselves, all of it, a play at becoming a hyperscaler in its own right. Broadcom's CEO, Hawk Tan, put it simply this morning, if you do your own chips, you control your destiny. He's on mad money tonight with our Jim Cramer. Mel? Mackenzie, this is very different from the other deals that OpenAI has signed with an AMD and an NVIDIA. There's no stock element to this. There's no investment element to this. What is the importance of that? Well, that was the first question I asked, whether any equity was changing hands and the significance to me is that we keep having this conversation about a circular economy where the companies that are selling their chips to OpenAI are in some ways giving them a handout, whether it's $100 billion, $100 billion investment in the case of NVIDIA taking an equity stake in OpenAI or AMD giving equity in its company to OpenAI virtually for free in order to pay for its chips. But this is a notable departure, which seems like a promising sign because so much of the narrative around this AI bubble comes from the fact that the value creation is not necessarily real. And so that was the big concern and that's something that's not a factor here. We don't know the exact numeric terms of this deal and that's something I'm trying to find out now, Mel. But then that begs the question of how OpenAI will pay for this sort of deal. Well, it goes back to what Sarah Fryer, the company's CFO, told me a few weeks ago that equity is very expensive and not something that they want to hand out. So it's all about debt financing. And we started to see more creative structures just last week with XAI and SPV, where essentially XAI would rent the GPUs from the special purpose vehicle using the GPUs themselves as leverage. And Fryer was teasing at the fact that there are a lot of financial instruments that they haven't dealt with before that they're looking into in order to fund this kind of grout. Because at this point, my back of the envelope math, we're talking about 33 gigawatt build out and commitments made over the last three weeks and they're roughly $50 billion per gigawatts. You're at $1.65 trillion. They don't have that in the bank. In fact, they haven't even wrapped their $40 billion round with SoftBank that needs to happen by the end of the year.

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