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

In a significant advancement for artificial intelligence technology, OpenAI and Broadcom have officially launched their first custom chip, named Jalapeño. This marks OpenAI's inaugural venture into AI-specific silicon, aimed at enhancing the company’s capabilities in delivering its AI models across platforms such as ChatGPT. Manufactured by Broadcom, the Jalapeño chip is designed primarily for inference—essentially the heavy computational tasks involved in serving AI models to end users. According to OpenAI’s president Greg Brockman, this initiative is a pivotal part of the company's strategy to create a comprehensive infrastructure for its models and products. "By developing more of our technology stack in-house, we can enhance performance and broaden access to advanced AI technologies," Brockman stated. Following the announcement, Broadcom's stock saw a modest increase of about 2%. OpenAI, which catalyzed the generative AI revolution in 2022, has been heavily reliant on Nvidia’s expensive graphics processing units (GPUs) to support its extensive AI workloads. However, with soaring demand for its services, OpenAI is actively seeking alternative advanced silicon to meet its needs. Earlier this year, the company established a partnership with Amazon Web Services, incorporating their Trainium AI chips into its operations. Furthermore, OpenAI has secured collaborations with Advanced Micro Devices and Cerebras, the latter having gone public recently. After 18 months of collaboration, OpenAI and Broadcom announced plans to produce and deploy racks of the newly designed chips by the end of this year, with a vision to generate enough power to support 10 gigawatts in the future. The Jalapeño chip, classified as an ASIC, is tailored for specific AI tasks and, while less versatile than Nvidia’s GPUs, offers a more cost-effective solution. OpenAI claims to have developed the chip within a nine-month timeframe and has also contributed significantly to the design of the overall computer systems in which it will operate. The companies refer to Jalapeño as an "Intelligence Processor," positioning it as the inaugural "AI accelerator" in a broader platform aimed at making advanced AI technologies faster, more reliable, and widely accessible. Broadcom has thrived amid the generative AI surge, aiding major tech players in crafting custom AI chips. Since the end of 2022, Broadcom’s stock has surged nearly sevenfold, with a 10% increase noted so far in 2026. A physical sample of the Jalapeño chip is scheduled for delivery to OpenAI, with initial deployment targeted for late 2026 and plans for expansion in subsequent years.