Broadcom demands Microsoft purchase 40% of OpenAI chips
broadcom will not manufacture openai's custom ai chips unless microsoft commits to buying 40 percent of the volume, a condition microsoft has not yet accepted.
openai's ambitious $180 billion plan to build custom ai infrastructure faces a hurdle after broadcom conditioned manufacturing on microsoft buying 40 percent of the initial chips. the first chip, codenamed 'jalapeno', targets a 2027 release and aims to run openai models more efficiently than current nvidia hardware. internal messages from openai manager sachin katti criticize the dependency on microsoft as 'financially unattractive,' though the arrangement is currently limited to the first phase. this follows a recent softbank loan reduction, as openai's private status continues to complicate large-scale financing and valuation.