OpenAI and Broadcom have unveiled a custom artificial-intelligence chip called Jalapeno, built from scratch to power ChatGPT. The reveal lands after a much larger arrangement with Nvidia failed to come together.
According to Yahoo Finance, Nvidia at one point explored a chip deal with OpenAI worth as much as $100 billion. That partnership did not materialize, and OpenAI is now designing its own silicon instead.
The MSN report frames the new chip pointedly: Nvidia once pledged up to $100 billion to OpenAI, and now OpenAI has produced hardware designed to require less of Nvidia's chips. In other words, the company behind ChatGPT is trying to reduce its dependence on the supplier that currently dominates the AI hardware market.
The chip is the product of a partnership with Broadcom, the semiconductor giant that traded under the ticker AVGO. Zacks Investment Research raised the obvious investor question its coverage poses in its headline: whether the Jalapeno launch signals more upside for Broadcom's stock, given that Broadcom is helping design and build the part.
The sources here do not provide technical specifications, production timelines, or pricing for Jalapeno, so those details remain unstated. What is clear from the coverage is the strategic shift: rather than buying ever-larger quantities of Nvidia hardware, OpenAI is moving to control more of its own chip supply.
Why it matters: Nvidia's grip on AI computing has been one of the defining business stories of the era, and a major customer like OpenAI building rival silicon — with Broadcom's help — could reshape who profits from the AI boom.