TMTPOST -- OpenAI on Monday was said to have another partner for its artificial intelligence (AI) chip efforts.

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OpenAI is in discussions with Arm Holdings plc, about using an central processing unit (CPU) designed by the British company owned by Japanese conglomerate SoftBank Croup Corp. with OpenAI’s AI server chip, The Information reported, citing anonymous sources close to Arm. While OpenAI is joining force with Broadcom on its AI chip, Arm reportedly hopes OpenAI will also use the CPU with chips from two AI chip giants -- Nvidia Corp. and Advanced Micro Devices Inc. (AMD).

The report suggested the partnership with OpenAI could eventually make SoftBank a big winner as the aforementioned CPU for OpenAI is worth billions of dollars in potential revenue to Arm. SoftBank, which owns a nearly 90% stake in Arm, has pledged to buy billions of dollars’ worth of AI from OpenAI annually, beginning this year, including in technology that would help Arm reduce the amount of time it takes to develop new chips, the report quoted a document.

The U.S.-listed shares of Arm surged up to more than 10% in after-trading hours on Monday following the report. Earlier that day, Broadcom stock jumped 9.9% on the chip company’s deal with OpenAI.

Broadcom and OpenAI announced they agreed on a collaboration for 10 gigawatts (GWs) of custom AI chips and computing systems over the next four years. OpenAI will design the its own chips,  which will allow it to embed what it has learned from developing AI models directly into the hardware that underpins future systems. Broadcom will help develop  and deploy the systems, which are built on its Ethernet and other connectivity solutions. 

The two companies didn’t disclosed financial terms. The deal will be worth multi-billions of dollars, the Wall Street Journal learned from people familiar with the matter.  

The chip, co-developed by OpenAI and Broadcom, will be manufactured by Taiwan Semiconductor Manufacturing Co. (TSMC), which makes most other AI chips, and Broadcom and OpenAI are still testing small batches of their co-designed chip, The Information reported. 

"Partnering with Broadcom is a critical step in building the infrastructure needed to unlock AI's potential and deliver real benefits for people and businesses," OpenAI CEO Sam Altman said in a release. "Developing our own accelerators adds to the broader ecosystem of partners all building the capacity required to push the frontier of AI to provide benefits to all humanity."

OpenAI President Greg Brockman in a video said his company and Broadcom has been working together on the AI chip for 18 months. He noted the idea for developing in-house chip stemmed from frustrations OpenAI experienced a few years ago when it talked to a series of chip startups about the direction that it visioned as the future of AI development, but "a lot of them just didn't listen to us." 

The agreement with OpenAI marks a validation moment for Broadcom's technology - and for application-specific integrated circuits in general. Broadcom makes ASICs, a different type of chip than the graphics processing units sold by Nvidia and AMD.

Melius Research analyst Ben Reitzes saw the deal to amount to "big upside" for Broadcom's AI revenues. He expected  the revenue per GW could come out to about $20 billion, translating to at least $40 billion a year of upside starting in the second half of fiscal 2026, which roughly aligns with the second half of next calendar year.