(Bloomberg) -- Broadcom Inc. shares gained as much as 4% after Reuters reported that OpenAI is working with the company on a new artificial intelligence chip.
OpenAI is using Broadcom and contract manufacturer Taiwan Semiconductor Manufacturing Co. to build an in-house processor that can help handle its burgeoning AI demands, according to Reuters, which cited unidentified people familiar with the project.
At the same time, OpenAI is backing away from plans to build its own network of factories due to the time and cost they would require, Reuters said.
Broadcom shares climbed as high as $178.86 in New York trading on Tuesday. Even before the latest gain, they were up 54% this year. TSMC’s US-traded shares advanced as much as 1.5%.
OpenAI’s ChatGPT chatbot and other AI services have required massive amounts of computing power to develop and run — with much of that coming from Nvidia Corp. chips. To meet the demand, the industry has been scrambling to find alternatives to Nvidia. That’s included embracing processors from Advanced Micro Devices Inc. and developing in-house versions.
Representatives for OpenAI, Broadcom and TSMC didn’t immediately respond to requests for comment.
The Information reported in June that Broadcom had discussed making an AI chip for OpenAI.
--With assistance from Ian King.
(Updates shares in fourth paragraph. A previous version of the story corrected Broadcom’s corporate suffix.)
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