Bloomberg Intelligence Open-AI, Broadcom Sign 10-Gigawatt Pact for Chips, Networking
Oct 13, 2025
OpenAI and Broadcom are teaming up for a massive 10-gigawatt AI data center capacity expansion. They'll create custom chips that could significantly cut costs compared to existing competitors. Meanwhile, First Brands faces turbulence with a CEO resignation amid bankruptcy, raising concerns about the auto market. In media news, Warner Bros turned down Paramount's low takeover offer, keeping its options open for future negotiations. Discussions around Apple’s potential role in AI infrastructure highlight its challenges in catching up.
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Custom Chips Cut AI Infrastructure Costs
- OpenAI is pursuing massive compute scale via multi-vendor and custom-silicon deals to cut costs and secure capacity.
- Custom Broadcom-style ASICs can reduce per-chip costs ~30-40% versus merchant GPUs, enabling far larger datacenter builds.
Broadcom Enables Lower-Cost Custom Silicon
- Broadcom will supply custom silicon enabling lower per-gigawatt costs compared to merchant GPUs from NVIDIA and AMD.
- Mandeep Singh quantifies the difference: custom chips can cost roughly $6k each versus $30k for comparable merchant AI chips.
Plan Multiple Funding Sources For Scale
- OpenAI will need diverse financing sources beyond vendor investments to fund huge datacenter builds.
- Expect private deals, revenue growth, and milestone-based capital raises to fill remaining funding gaps.