OpenAI has showed off the company’s first custom AI chip, which it designed with Broadcom, as it seeks to speed its development of its infrastructure.
AI labs such as OpenAI and Anthropic are struggling to obtain enough computing horsepower to run the latest, most powerful chatbots and coding apps. Some, such as OpenAI, have turned to developing in-house chips in order to reduce the cost and create an alternative to Nvidia’s GPUs that are commonly used for AI.
OpenAI’s engineers designed the chip, called Jalapeño, together with Broadcom to perform a specific AI task known as inference, during which data is crunched in order to answer a user’s query to a chatbot like ChatGPT.
The chip made by the team is as good as the Blackwell chips made by Nvidia or the tensor processing units designed by Google, Broadcom CEO Hock Tan said in an interview.
The Jalapeño processor is designed to work speedily and efficiently with the large language models (LLMs) that power many AI applications, OpenAI hardware chief Richard Ho said. “It will be performant on, we think, all kind of future iterations of LLMs,” he said.
The company plans to deploy Jalapeño by the end of this year, and it is the first step in a multi-generation chip development plan, OpenAI said.
Canadian electronics manufacturer Celestica will build the server systems, which, like the chips will be used only by OpenAI. The San Francisco company said it has samples of the chip running in its labs and they were operating at the target power and performance with the company’s GPT-5.3-Codex-Spark AI model.
Memory shortages
It took the company’s engineers roughly nine months to complete the chip design before it sent it to Taiwan’s TSMC for manufacturing, in part because of using AI to speed specific aspects of the process, OpenAI said.
To make their own in-house chips, Meta Platforms, Amazon and Google have turned to the likes of Broadcom and Marvell, which provide specific design services and intellectual property that can be difficult to replicate in-house. Anthropic is weighing building an AI chip of its own, sources told Reuters in April.
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At the moment, however, because of the AI-related surge in memory demand, Broadcom’s profit margin on the custom chips is not as high as some of the other chips it makes, such as networking switches, Tan said.
AI chips require large amounts of high-bandwidth memory, which challenges Broadcom’s margins on custom AI chip products, Tan said. Tan said South Korea’s SK Hynix and Samsung Electronics supply Broadcom with memory chips. — Max A Cherney, (c) 2026 Reuters