OpenAI focuses on diversification in the chip sector: GPU giant Nvidia faces competition

OpenAI, known for developing the widely used Chatbot system ChatGPT, is seeking alternative ways in chip procurement due to current supply chain bottlenecks and rising costs. Although the company has traditionally relied heavily on Nvidia's GPUs—which make up over 80 percent of the AI chip market—OpenAI is now planning to diversify its supply chain. Originally considering building its own chip manufacturing capability, OpenAI has abandoned this plan due to high costs and lengthy implementation. Instead, the focus is now on developing its own chips while relying on partners like Broadcom and TSMC for manufacturing. According to insider reports, production of these custom chips is expected to start in 2026. In parallel, OpenAI is also integrating chips from Advanced Micro Devices (AMD) through Microsoft's Azure platform to compete with Nvidia. AMD has set ambitious targets with its new MI300X processors to challenge Nvidia's dominance in the AI chip sector. OpenAI's move towards diversification seems all the more necessary as the company expects a loss of $5 billion this year with revenue of $3.7 billion.