Nvidia shares fell on Friday after Broadcom reported strong earnings and confirmed a major chip deal with OpenAI, signaling rising competition in the AI hardware space.
Broadcom’s Q3 results included $15.95 billion in revenue and adjusted EPS of $1.69. AI-related revenue jumped 63% to $5.2 billion.
A major highlight for Broadcom was signing a $10 billion custom chip deal with OpenAI. The chips will go into production in 2025, with volume shipments expected in 2026.
Broadcom is gaining ground with custom AI accelerators and networking chips, challenging Nvidia’s dominance in the GPU market. OpenAI’s move follows similar strategies by Google, Amazon, and Meta, who are developing proprietary chips for cost savings and performance optimization.
Analysts from HSBC warn that custom silicon could grow faster than Nvidia’s GPU business by 2026, reshaping the competitive landscape.
In terms of stock performance in 2025:
- Nvidia is up 29%
- Broadcom is up 32%
By leveraging Broadcom’s chips, OpenAI aims to meet the compute demands of ChatGPT’s 700 million weekly users.