Broadcom shares fell following reports of a financing deadlock in its custom AI chip partnership with OpenAI. The initial production phase for the project requires an $18 billion investment.
Broadcom is reportedly hesitant to fund the venture without a firm purchase commitment from a major partner. The chipmaker requested that Microsoft agree to purchase approximately 40% of the initial chip supply.
Under the proposal, Microsoft would install the hardware in its data centers and rent capacity back to OpenAI. The deal’s progression now depends on Microsoft’s final decision.