OpenAI’s custom chip design is near completion

By Fionna Agomuoh Published February 10, 2025

OpenAI is poised to enter the custom component business in 2025. The brand is currently in talks with Taiwan Semiconductor Manufacturing Co. (TSMC) to fabricate the first generation of its in-house AI-based silicon, according to an exclusive report by Reuters.

The AI start-up has plans to create custom chips to lessen its dependence on AI chips from Nvidia. Sources told Reuters that OpenAI is wrapping up the final design of its chip, which should be complete in the coming months. The company will design the chip in collaboration with Broadcom. The 40-person in-house team is spearheaded by former Google engineering lead, Richard Ho.

Once designs are complete, the company will send them to TSMC for an initial fabrication process called “taping out,” using its 3-nanometer process technology, to ensure that the chip is viable for mass production. If successful, the chip could begin mass production at TSMC in 2026.

While reports of these plans are circulating, neither OpenAI nor TSMC have confirmed that they are designing or collaborating on an AI component.

Even so, Reuters noted that OpenAI striving to mass produce an in-house AI chip in such a short time frame is an ambitious goal. Such a feat is extremely expensive and time-consuming. There is also the possibility an initial tape-out could fail, meaning the company would have to test for faults and repeat the process.

However, if a tape-out is successful, and OpenAI is able to develop its first in-house AI chip in a snappy schedule, the company will have completed a feat similar organizations have not been able to achieve. The brand would have “a strategic tool to strengthen OpenAI’s negotiating leverage with other chip suppliers,” sources told the publication.

After the first chip rollout, the company plans to create more powerful components, with greater abilities version after version, Reuters added.

OpenAI has long had heavy competition with American contemporaries in the AI space. However, the introduction of the Chinese start-up, DeepSeek, with its open-source platform has really shaken up the industry for all involved. CEO Sam Altman recently indicated that the company’s former strategy of being a closed-sourced business is a thing of the past.

The brand has taken some swift moves in response to the dark horse, DeepSeek, in aligning itself with U.S. President Donald Trump’s $500 billion Stargate infrastructure program. Reports also indicate OpenAI is close to closing a $40 billion deal with Japanese investment firm, SoftBank. The company also recently announced a new visual rebrand. In addition to recent product launches, including o3 mini reasoning model and the Deep Research feature, the brand aired its first television commercial at the 59th Super Bowl on Sunday.

Despite its efforts to develop AI chips quickly, the company remains very much in start-up mode. Sources told Reuters even if OpenAI is successful at developing and mass-producing its own chips, the components would have a limited function within the company. They would mainly be used for running AI models, whereas the brand also requires chips for training AI models.