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.