Broadcom Stock Jumps After $10 Billion AI Infrastructure Deal With OpenAI

OpenAI and Broadcom (AVGO) announced Monday a joint initiative to build and deploy 10 gigawatts of custom AI accelerators.

Broadcom's stock soared more than 11% pre-market following news of the deal and was among the top trending tickers on Stocktwits. Retail sentiment around the company on the platform moved higher within ‘bullish’ territory. Meanwhile, retail sentiment around OpenAI, which is not a publicly listed company, was also in the ‘bullish’ zone, accompanied by ‘high’ levels of chatter.

The companies did not disclose the financial terms of the agreement. Analysts had assumed this was the same $10 billion customer partnership that Broadcom announced during its September earnings call. However, Broadcom’s chip president, Charlie Kawwas, told CNBC that is not the case. “I would love to take a $10 billion [purchase order] from my good friend Greg [Brockman],” he said. “He has not given me that PO yet.”

Sam Altman, the co-founder and CEO of OpenAI, described the partnership as “critical” in building the infrastructure needed to unlock AI’s potential. “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,” he said.

Altman’s “broader ecosystem of partners” includes Nvidia (NVDA), Oracle (ORCL), and Advanced Micro Devices (AMD), with whom OpenAI has recently announced fresh partnerships. Altman and other management have not been shy in expressing that OpenAI needs more compute power to build out efficiently. 

“These things have gotten so complex you need the whole thing,” Altman said in a podcast with OpenAI and Broadcom executives that the companies released along with the news.

The company said that by designing its own chips and systems, OpenAI can embed insights from frontier models directly into hardware, enhancing intelligence and performance. The AI racks, scaled with Ethernet and other Broadcom networking solutions, will be deployed across OpenAI facilities and partner data centers.

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