Broadcom Inc (NASDAQ:AVGO, ETR:1YD) shares jumped 7.7% on Monday, adding about $126 billion to the company’s market value, after announcing a major partnership with OpenAI to develop custom artificial intelligence chips.
Under the agreement, OpenAI will design the processors while Broadcom handles production and deployment, with the rollout set to begin in the second half of 2026. The companies plan to deliver 10 gigawatts of computing capacity. That's enough energy to power more than eight million U.S. homes.
The collaboration marks OpenAI’s latest move to secure reliable chip supply as demand for its ChatGPT and enterprise AI products soars. It follows a 6-gigawatt chip deal with AMD and a planned $100 billion data center partnership with Nvidia.
OpenAI chief executive Sam Altman said working with Broadcom was “a critical step in building the infrastructure needed to unlock AI’s potential.”
The deal strengthens Broadcom’s position as one of the biggest beneficiaries of the AI boom.
Once best known for networking components, the company has seen its stock rise nearly sixfold since late 2022 as demand for AI hardware accelerates. The new chips are expected to be fully deployed by 2029 using Broadcom’s Ethernet-based networking technology.
The shares were up $25.65 at $350.28.