Broadcom Gains on Report That It’s Discussing Chip With OpenAI

(Bloomberg) -- Broadcom Inc. shares gained almost 3% on Thursday after the Information reported that it has discussed making an artificial intelligence chip for OpenAI, potentially vaulting it further into Nvidia Corp.’s territory.

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OpenAI, maker of the ChatGPT chatbot, broached the idea with Broadcom as part of the startup’s wider discussions with chip designers, the news outlet said. The effort also has included OpenAI hiring former Google employees who worked on that company’s Tensor processor.

Broadcom rose 2.9% to $160.53 in New York trading after the report was published. The stock has gained 44% this year, lifted by the company’s burgeoning AI equipment sales.

Representatives for Broadcom and OpenAI didn’t immediately respond to requests for comment.

Though Nvidia has been the biggest beneficiary of AI spending, Broadcom is making fast headway in the market. It sells a range of components to data center operators, which are rapidly expanding their facilities to accommodate AI services. Broadcom’s AI sales will be more than $11 billion in fiscal 2024, Chief Executive Officer Hock Tan has said.

OpenAI CEO Sam Altman, meanwhile, has been working to raise billions of dollars from global investors for a chip venture, aiming to use the funds to set up a network of factories to manufacture semiconductors, Bloomberg reported earlier this year.

--With assistance from Shirin Ghaffary and Ian King.

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