OpenAI Begins Production of Its Own AI Chips: Competing with Nvidia and AMD

According to sources close to the company, to support ChatGPT and other artificial intelligence projects, OpenAI is preparing to develop and manufacture its own AI chip in collaboration with Broadcom and TSMC.

OpenAI is being compelled to take steps to cope with increasing demands. Currently, the company feeds almost all of its artificial intelligence systems with Nvidia chips, but this situation is expected to change soon. According to sources familiar with the company speaking to Reuters, OpenAI is working to develop its first chip in collaboration with Broadcom and TSMC to support its projects. The company is also starting to add AMD chips alongside Nvidia chips.

OpenAI Has Hit the Button to Develop Its Chip

As mentioned in previous reports, OpenAI and its CEO Sam Altman initially aimed to establish a chip manufacturing network to diversify chip supply and strengthen the supply chain. However, due to the incredible cost, plans have shifted focus to developing proprietary chips for the company. Thus, OpenAI is moving in the direction of companies like Amazon, Meta, Google, and Microsoft.

In this context, OpenAI plans to develop its own special hardware by 2026 to enhance its artificial intelligence efforts and manage costs. It is reported that OpenAI is working to develop custom chips suitable for managing large-scale AI workloads in collaboration with Broadcom. A production capacity agreement has been established with TSMC, the Taiwanese semiconductor giant. The chip development team reportedly includes engineers who have worked on Google’s AI-focused Tensor processors, and the team consists of about 20 people.

However, mass production of OpenAI’s custom-designed hardware is not expected to begin before 2026. During this period, the company has started incorporating AMD's MI300 chips, released last year, into Microsoft Azure to enrich chip supply. While OpenAI’s strategy resembles other tech giants that are moving towards custom chip design to control costs and gain access to AI server hardware, there are some shortcomings. Companies like Google, Microsoft, and Amazon have been developing their own chips for several generations. It is noted that OpenAI will need significantly more funding to become a true competitor.