Episode summary
Open-AI, Broadcom Sign 10-Gigawatt Pact for Chips, Networking | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Mandeep Singh, Steve Man, Geetha Ranganathan
Summary
OpenAI’s multiyear pact with Broadcom is framed as another step in a relentless race to secure AI compute, adding 10 gigawatts of planned capacity after prior arrangements with Nvidia and AMD. The key distinction, Bloomberg Intelligence’s Mandeep Singh said, is that Broadcom is helping OpenAI build custom silicon rather than merchant chips, which could cut per-gigawatt costs by roughly 30% to 40% and save tens of billions of dollars at scale. The tradeoff is financing: even with partners, OpenAI still has to fund a huge capital bill and will likely rely on revenue growth and private financing rounds to keep expanding.
Key takeaways
- Mandeep Singh said OpenAI is pursuing a Google-style custom-chip strategy with Broadcom to lower costs versus Nvidia and AMD.
- He estimated 1 gigawatt of Nvidia-based AI infrastructure could cost $40 billion to $50 billion, versus $25 billion to $30 billion with Broadcom silicon.
- Singh said Apple is a glaring absence in the AI infrastructure race and may eventually need a Broadcom-like custom-silicon strategy.
- Steve Man said First Brands looks like a company-specific credit problem, with O'Reilly, AutoZone and Advanced Auto Parts likely shielded from direct supply-chain damage.
- Geetha Ranganathan said Warner Bros. Discovery rejected Paramount Skydance’s reported $20 a share approach as too low, with David Zaslav seeking closer to $40 a share.
Notable quotes
“Open AAI is going after adding as much compute capacity as they can and uh they did first 10 GW with Nvidia, 6 GW with AMD and now 10 GW with uh Broadcom”
“with Broadcom they get to use their own chips. Nvidia and AMD are what we call merchant silicon”
“I mean, imagine an Nvidia AI chip cost you 30 grand. A custom silicon that Broadcom is making for Google cost you six grand”
“I think those are really contained situation to those companies and don't feel there's a broader impact, but you never know”
“David Zazlav, the CEO of of Warner has basically rejected that offer as being too low”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m.
Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Mand Deepep Singh joins us here because we want to get some more details on this Broadcom deal because again moving the stock big time helping propel the uh the NASDAQ to a nice move today.
Mandep Singh is a senior tech analyst at Bloomberg Intelligence. He's been telling us about AI for like a couple of years now. And folks, if you don't really know what AI is and you have access to the Bloomberg terminal, just go type in BIGO.
That'll get you to Bloomberg Intelligence homepage. In the search bar, just type in AI and it'll bring up uh send you to the definitive report, really large report on AI. What is it?
How to play it? Uh and what's the future of AI? It is the definitive research report on Wall Street on AI.
And Mandep Singh is to blame for that. Uh Mandep talk to us about this Broadcom deal here. Um lay it out for us.
What does it mean for Broadcom and for um just kind of the and open AI as well? Yeah, I mean uh look, Open AAI is going after adding as much compute capacity as they can and uh they did first 10 GW with Nvidia, 6 GW with AMD and now 10 GW with uh Broadcom. And the difference here is with Broadcom they get to use their own chips.
Nvidia and AMD are what we call merchant silicon.
Exact. I mean that's basically generalized chips where you can deploy the workload you want whether it's from open AAI or Microsoft or any other vendor.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai data center capacity
- chip and networking partnerships
- 10-gigawatt ai infrastructure
- media takeover negotiations
- autos and industrials news
Companies and tickers mentioned
- AVGO
- OpenAI
- Broadcom
- First Brands Group
- Warner Bros. Discovery
- Paramount Skydance
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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