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Broadcom Stock Surges on OpenAI Deal for Custom AI Systems

Oct 13, 2025 09:29:00 -0400 by Angela Palumbo | #Technology

The pair will begin deploying the systems in the second half of 2026. (Dreamstime)

Key Points

OpenAI and Broadcom are partnering to develop and deploy 10 gigawatts of custom artificial-intelligence accelerators, the companies announced Monday.

OpenAI, the maker of ChatGPT, will design the accelerators and Broadcom will provide Ethernet and other connectivity solutions at OpenAI’s facilities and partner data centers.

The pair are slated to begin deploying the systems in the second half of 2026 and complete the deployments in 2029.

The companies didn’t disclose financial terms of the deal, but The Wall Street Journal, citing people familiar with the matter, reported that the arrangement will be worth multiple billions of dollars.

Broadcom shares jumped 9.9% to close at $356.70. It was Monday’s second best performing stock in the Nasdaq 100 index.

The stock jumped 9.4% on Sept. 5 after the company said on its third-quarter earnings call that it had secured $10 billion in AI orders from a new qualified customer, which analysts believed was OpenAI.

On Monday, Broadcom President Charlie Kawwas told CNBC he hasn’t received any such $10 billion order from OpenAI.

On a podcast announcing the partnership, Broadcom CEO Hock Tan said the AI buildout is similar to the railroad and the internet in providing what will be critical infrastructure to the economy.

OpenAI CEO Sam Altman added that his company will have little more than 2 gigawatts of capacity at year’s end, but he believes there is demand with current AI models to “saturate” 30 gigawatts of capacity.

Monday’s announcement also comes after OpenAI has made big deals with other technology companies in the past month or so.

On Sept. 10, OpenAI signed a contract with Oracle to purchase $300 billion in computing power over about five years.

OpenAI and Oracle are also in a partnership with the Trump administration to invest $500 billion over the next four years to build out 10 gigawatts of capacity for AI operations in the U.S.

On Sept. 22, chip maker Nvidia announced that it plans to invest as much as $100 billion in OpenAI, the parent of ChatGPT, to support the buildout of AI data center capacity.

And on Oct. 6, Advanced Micro Devices announced a deal to become a key supplier to OpenAI’s AI infrastructure buildout.

Write to Nate Wolf at nate.wolf@barrons.com and Angela Palumbo at angela.palumbo@dowjones.com