OpenAI and Broadcom have jointly developed a custom AI chip named Jalapeño, which has now entered the testing phase. Early data indicates that its performance per watt is expected to significantly outperform current advanced levels, while achieving approximately 50% cost savings compared to typical AI GPUs.
As the chip is set to be integrated into data centers of partners such as Microsoft within the year, OpenAI is seeking to strengthen its AI growth flywheel through a full-stack approach combining models, applications, and computing power.
It is worth noting that, with the support of OpenAI’s AI, Jalapeño took only nine months from initial design to manufacturing tape-out. The two companies claim this is “the fastest ASIC development cycle in the history of high-performance advanced semiconductors.”
Hock Tan introduced that the two companies already have a roadmap for future chips, with the next generation planned for launch in 2028, followed by an annual release cadence. Although Jalapeño focuses on inference tasks, OpenAI may also consider other workloads in future chip generations.
In addition to purchasing Nvidia chips and developing its own chips, OpenAI is also actively expanding its supplier base. The company has already reached multibillion-dollar deals with AMD and Cerebras.
As for the question highly watched by capital markets — “where does OpenAI’s money come from” — as of today, the parties still remain vague. Earlier reports said OpenAI plans to invest tens of billions of dollars in Broadcom chips.
Earlier this year, OpenAI raised $122 billion in funding to support its heavy investment in chips, data centers, and talent. The company has also reached financing agreements with suppliers including Nvidia and AMD, although these deals have been criticized for their “circular financing” nature.
Richard Ho, OpenAI’s head of hardware, declined to disclose how the company will finance these chips, noting that financing arrangements will be finalized after all processor orders are completed. Hock Tan also declined to comment, but reiterated that Broadcom has established a chip financing vehicle with private equity giants Apollo Global Management and Blackstone, which will also help OpenAI.
