OpenAI and Broadcom $AVGO unveiled their first jointly developed AI chip on Wednesday, a processor called Jalapeño designed to run the company's AI models more efficiently and at lower cost.
The chip is built for inference — the process of responding to user queries in products like ChatGPT — and early samples are showing cost savings of roughly 50% compared with typical AI graphics processing units, Broadcom CEO Hock Tan said. OpenAI said samples of the chip are running in its labs at target power and performance levels with its GPT-5.3-Codex-Spark AI model.
OpenAI's hardware chief Richard Ho said the chip was designed with large language models in mind but described it as "a very general purpose device" that "will address future LLM innovations." OpenAI's engineers completed the chip design in roughly nine months, aided in part by AI tools, before sending it to Taiwan's TSMC $TSM for manufacturing, the company said.
"By designing more of the stack ourselves, we can serve more intelligence with greater efficiency and keep pushing advanced AI toward broader access," OpenAI President Greg Brockman said in a statement.
The companies are targeting initial deployment of the Jalapeño chips by the end of 2026. The finalized chips will be integrated into data centers operated by Microsoft $MSFT and other partners. Canadian electronics manufacturer Celestica will build the server systems.
Unlike Nvidia $NVDA's more versatile GPUs, ASICs — the category of chip that Jalapeño belongs to — trade flexibility for lower cost and the ability to be tailored to particular AI workloads, according to CNBC. In an interview with Reuters, Tan placed Jalapeño on par with two of the industry's most powerful AI accelerators: Nvidia's Blackwell line and the tensor processing units developed by Google $GOOGL.
Broadcom and OpenAI announced their chip partnership in October, with plans to build enough silicon to require 10 gigawatts of power. On Wednesday, Tan said demand has grown strong enough that his earlier projection of 1.3 gigawatts of chip deployments next year may prove conservative, telling Bloomberg: "We like to think we can do better because there is a lot of demand." The two companies have a roadmap for future chip generations, with the next version planned for 2028 and annual releases after that.
Broadcom stock climbed about 2% following the announcement.