The collaboration will see Broadcom develop and deploy OpenAI-designed processors beginning in the second half of 2026, with full rollout expected by 2029.

According to both companies, the project will deliver up to 10 gigawatts of custom chips, a scale that would consume roughly the same power as eight million U.S. homes or five times the energy output of the Hoover Dam. 

Shares of Broadcom rose by more than 10% after the announcement, as investors believe in the chipmaker’s impact in the AI hardware market.

“Partnering with Broadcom is a critical step in building the infrastructure needed to unlock AI’s potential,” Sam Altman, CEO of OpenAI, said in a statement.

While the financial terms of the deal remain undisclosed, analysts say OpenAI’s plan is capital-intensive. Gadjo Sevilla, an analyst at eMarketer, noted that “Financing such a large chip deal will likely require a combination of funding rounds, pre-orders, strategic investments, and support from Microsoft, as well as leveraging future revenue streams and potential credit facilities.”

Experts estimate that a single 1-gigawatt data centre could cost between $50 billion and $60 billion, with Nvidia products alone accounting for more than half of those expenses. This places the estimated cost of OpenAI’s 10GW buildout at a huge scale, stressing the financial commitment required to sustain its growing AI infrastructure.

The Broadcom partnership follows a string of recent hardware deals by OpenAI. Just last week, the company announced a 6-gigawatt chip supply agreement with AMD, which includes an option to acquire a stake in the chipmaker. 

Days earlier, Nvidia revealed plans to invest up to $100 billion in OpenAI and provide advanced data-centre systems with at least 10GW of capacity.

In joining the ranks of companies like Google, Amazon, and Meta, which already design custom silicon for their AI systems, OpenAI aims to gain a stronger hold on its computing backbone. 

However, creating high-performance chips from scratch remains a big technical challenge. Even Microsoft and Meta’s internal chip projects have struggled to match Nvidia’s performance in the AI accelerator space.

For Broadcom, the collaboration strengthens its standing as one of the biggest beneficiaries of the AI hardware boom. The company’s stock has surged nearly sixfold since the end of 2022, driven by rising demand for custom chips and networking solutions. 

Last month, Broadcom revealed a $10 billion order from an unnamed new client, though the company later clarified that OpenAI was not that customer.

The upcoming OpenAI chips will be scaled entirely on Broadcom’s Ethernet and networking infrastructure, directly challenging Nvidia’s InfiniBand system, which currently tops high-performance AI workloads.

If OpenAI meets its 2026 production target, it would be one of the fastest chip development turnarounds in the industry’s history, and a big moment for a company aiming to keep pace with its own growth.

This is far more than a routine supplier deal; it’s a strategic pact designed to recalibrate the global semiconductor landscape by bringing cutting-edge chip production to American soil and laying a high-stakes hardware bet on the nation’s AI future.

Riding the AI Chip Boom

Tesla’s announcement comes during significant growth in AI-silicon demand:

• The global AI-chip market grew from $123.6 billion in 2024 to $166.9 billion in 2025
• $311.58 billion: Projected market size by 2028
• 68% share of contract-foundry revenue held by Asia-Pacific fabs in 2024

Tesla selected Samsung, the world’s largest semiconductor maker, as its strategic partner to secure the substantial volume of AI silicon required for self-driving vehicles, data centres, and robotics applications.

From Vision to Blueprints: Taylor, Texas

Samsung will build a 6 million sq ft fabrication plant in Taylor, Texas, scheduled to open in early 2026, rather than using offshore facilities.

Key highlights include:

• $8.6 billion invested in construction, creating 8,868 direct and 9,768 indirect jobs, and supporting 3,664 ongoing local positions during plant ramp-up
• 1,800 high-skill roles in engineering, process development, and clean-room operations at full operation
• Up to $4.7 billion in CHIPS Act incentives, part of a broader $37 billion regional investment program

Tesla’s purchase order covers much of this capital expenditure, guaranteeing its chip supply while reducing Samsung’s financial risk for U.S. expansion.

Discussing the deal, Anirudh Agarwal, CEO, OutreachX, says, “By anchoring AI chip production on U.S. soil, Tesla and Samsung are not just securing supply, they’re catalysing a new era of American tech independence.”

Tesla’s Chip Requirements

Tesla’s electric vehicle scale makes it an effective “anchor tenant” for America’s onshore fabrication goals:

• 1.789 million vehicles delivered in 2024, each equipped with two Full Self-Driving chips for redundancy, totalling over 3.5 million chips
• Increasing demand from Tesla’s data centres, robotics initiatives (including Optimus), and AI research facilities will expand silicon requirements

This consistent demand provides Samsung with the volume certainty needed to justify a large U.S. fabrication facility, converting Tesla’s production forecasts into a foundation for America’s hardware infrastructure.

Aligning Public and Private Incentives

The partnership timing aligns with the Biden administration’s CHIPS and Science Act:

• $39 billion allocated to boost domestic semiconductor manufacturing
• $13 billion dedicated to R&D and workforce development

Tesla’s $16.5 billion order coordinates with these federal incentives, demonstrating public-private collaboration that converts policy objectives into manufacturing capacity.

Seeding America’s AI Sovereignty

The EV supply-chain announcement has developed into America’s investment in technological capabilities. By combining Tesla’s chip requirements with Samsung’s Taylor fabrication expansion and federal funding, this partnership secures components for vehicles while establishing infrastructure for AI innovation. The silicon powering future technological developments will be manufactured on U.S. soil, representing America’s commitment to domestic hardware production.

Analysts expect the South Korean tech giant to post an operating profit of 6.3 trillion won ($4.62 billion) for the April-June period, a steep 39% drop in Samsung Q2 profit, compared to the same quarter last year.

The second-quarter performance, if confirmed, would be Samsung’s lowest profit in a year and a half. It also worsens concerns about the company’s capacity to compete in the accelerating AI hardware space, where rivals like SK Hynix and Micron are gaining ground.

While Samsung has pushed aggressively to position its HBM3E chips at the heart of next-generation AI systems, execution has stumbled. 

Its 12-layer HBM3E stacks reportedly passed Nvidia’s bare-die tests but are still awaiting full-package certification. Meanwhile, both SK Hynix and Micron have already begun large-scale shipments of certified HBM3E chips to Nvidia, securing a head start in the booming AI memory market.

“HBM revenue likely remained flat in the second quarter, as China sales restrictions persist and Samsung has yet to begin supplying its HBM3E 12-high chips to Nvidia,” said Ryu Young-ho, senior analyst at NH Investment & Securities. He added that significant shipments to Nvidia this year are unlikely.

Samsung’s situation is further complicated by its exposure to China, which accounts for roughly 20% of its HBM sales. U.S. export restrictions on advanced chips have disrupted those flows, and more hurdles could be on the way. 

Washington is reportedly weighing the revocation of technology authorisations that allow companies like Samsung to receive American chipmaking tools at their Chinese plants.

That risk of regulatory tightening is making investors doubtful, particularly with the added threat of proposed U.S. tariffs, up to 25% on non-U.S.-made smartphones. 

Analysts warn the current surge in Samsung smartphone sales, driven by pre-tariff stockpiling in the U.S., may not last. If tariffs are enforced in the second half of 2025, demand for premium models like the Galaxy S25 and Z Fold 7 could slow sharply.

In the face of these challenges, Samsung has begun supplying its 36GB 12-layer HBM3E stacks to AMD. The U.S. chipmaker confirmed in June that its MI350 AI accelerators will integrate Samsung’s memory chips, an encouraging sign, but not enough to offset Nvidia-related delays.

Investors have taken notice. Despite a 19% rise in Samsung shares this year, the company is still the worst-performing major memory chip stock of 2025. The KOSPI index has climbed 27.3% over the same period, leaving Samsung trailing behind.

As of Monday morning in Seoul, Samsung Electronics shares were down nearly 2%, underperforming the market yet again.

As we await the official release of Samsung Q2 profit, the company has not commented on whether its chips have passed Nvidia’s certification process. The company’s silence, combined with ongoing delays and regulatory risks, has increased doubts about its competitiveness in a market where being first, and fast, matters more than ever.