Broadcom-OpenAI deal expected to be cheaper than current GPU options

Core Insights - OpenAI is positioning itself as a hyperscaler to compete directly with Google by developing its own custom AI accelerators in partnership with Broadcom [1][2] - The initiative involves deploying 10 gigawatts of custom AI accelerators optimized for OpenAI's models, aiming to control the hardware and enhance user experience [2] - OpenAI's strategy includes building a robust ecosystem around its infrastructure and developer community, similar to Microsoft's approach with PCs [3][4] Company Strategy - OpenAI's move to become a hyperscaler allows for greater control over hardware, tighter integration, and a vertically stacked system that is difficult for competitors to replicate [4] - The company is also focusing on attracting developers to build on its models and sell software through its platform, which will deepen market lock-in [4] - Recent deals are not only about increasing computational power but also serve as a demonstration of strength within the tech industry [4] Market Dynamics - OpenAI has diversified its supply chain and partnerships, collaborating with companies like Nvidia, AMD, and Oracle [5] - Notably, Microsoft, which has historically provided compute resources through Azure, is seen as a significant partner that has not been included in recent announcements regarding new infrastructure [6]