OpenAI XPU: The AI Chip That Could Challenge NVIDIA
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Part 1. The Emergence of OpenAI’s XPU
At the end of 2022, OpenAI, the developer of ChatGPT, shocked the world by bringing generative AI into the mainstream. Within just a few years, OpenAI became the centerpiece of the global IT industry, evolving from a software startup into a paradigm-shifting force. In September 2025, the company once again captured headlines with groundbreaking news: “OpenAI will begin full-scale mass production of its own AI chip, codenamed ‘XPU,’ starting in 2026.” This report was confirmed by the Financial Times (FT) and Reuters, with U.S. semiconductor giant Broadcom revealed as the key partner.
Dependence on NVIDIA and Its Limitations
Until now, OpenAI has relied heavily on NVIDIA GPUs to train and operate its large-scale AI models. Systems like GPT-4 and GPT-5 involve trillions of parameters, requiring hundreds of thousands of GPUs. For example, GPT-3 alone was estimated to require more than 10,000 GPUs just for training. With each new model exponentially larger than the last, energy consumption and infrastructure costs skyrocketed.
CEO Sam Altman recently remarked, “We plan to double our computing infrastructure within the next few months.” This implied multi-billion-dollar GPU purchases. But GPU supply is limited, and prices have surged amid global demand. The latest H100 GPUs sell for between $20,000 and $40,000 each, making scalability increasingly unsustainable for OpenAI’s rapid growth.
The Solution: Building Its Own Chip
To overcome this bottleneck, OpenAI has chosen to develop its own AI chip. Designed in partnership with Broadcom, XPU is not a copy of NVIDIA’s GPUs but rather a custom chip optimized for OpenAI’s workloads—from large language model training to inference acceleration and energy efficiency.
The codename “XPU” itself carries significance. Like GPUs (Graphics Processing Units) and Google’s TPUs (Tensor Processing Units), the name highlights a next-generation processor tailored for AI. It symbolizes not just hardware innovation but also OpenAI’s ambition to control more of its technological stack.
Ultimately, XPU represents more than engineering progress. It is a strategic declaration: OpenAI intends to reduce dependency on NVIDIA and build its own integrated ecosystem of hardware and software—similar to how Google accelerated AI research with TPU adoption.
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Part 2. The $10 Billion Deal and the AI Chip Wars
Behind the XPU project lies a massive $10 billion order. In September 2025, Broadcom CEO Hock Tan revealed that the company had secured an unprecedented semiconductor contract from a “major client.” Industry consensus quickly identified this client as OpenAI.
A Market-Shifting Scale
$10 billion is no small number. The global AI semiconductor market in 2024 was valued at around $45 billion. If OpenAI alone accounts for nearly 20% of that scale, it signals just how urgently the company is seeking computing power. Such a concentrated order is extremely rare in the semiconductor sector and reflects OpenAI’s aggressive push to secure independence from NVIDIA.
For Broadcom, this deal provides both a stable revenue stream and a foothold in the rapidly growing AI chip arena—potentially challenging NVIDIA’s near-monopoly.
The “Chip Race” Among Big Tech
OpenAI is not alone in this strategy.
Google has been deploying TPUs (Tensor Processing Units) in its data centers since 2015, boosting services like Search, Translate, and YouTube recommendations.
Amazon designed Inferentia (for inference) and Trainium (for training) to optimize AWS workloads, offering lower costs and higher efficiency to cloud customers.
Meta (Facebook) is also developing custom chips to power its recommendation algorithms and metaverse infrastructure, focusing on energy savings and performance gains.
In this context, OpenAI’s move is less about ambition and more about survival. With NVIDIA maintaining an 80%+ market share in AI GPUs, and H100/B100 models dominating performance benchmarks, supply shortages and soaring costs left companies with no choice but to seek alternatives.
Thus, OpenAI’s XPU initiative is both a challenge to NVIDIA’s dominance and a lifeline for its own scalability.
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Part 3. The Significance of XPU and What Lies Ahead
Unlike commercial chips, XPU will not be sold externally. Instead, it will be deployed exclusively within OpenAI’s data centers. For everyday users, this means improved reliability and faster responses across services like ChatGPT and Copilot, as XPU reduces server bottlenecks and latency.
Growing Model Sizes Demand Specialized Hardware
AI models are growing at an exponential rate:
GPT-3 (2020): ~175 billion parameters
GPT-4 (2023): widely believed to have trillions of parameters
GPT-5 (2025): expected to exceed tens of trillions of parameters
The computational requirements to train and serve such massive models are staggering, making custom hardware like XPU indispensable for efficiency and scalability.
Cost Structure Revolution
Today, NVIDIA’s H100 GPUs cost $20,000–40,000 each, and large-scale AI systems require hundreds of thousands of units. This translates into tens or even hundreds of billions of dollars in expenses. By investing upfront in chip design and production, OpenAI can potentially save on long-term operational costs, secure supply chains, and optimize energy efficiency.
Two Possible Futures
1. Success Scenario
XPU works as intended, lowering costs and reducing dependence on NVIDIA.
OpenAI establishes a vertically integrated ecosystem—chip to software—accelerating research and making services like ChatGPT more affordable.
2. Risk Scenario
Semiconductor production proves difficult, with risks of design flaws, delays, or underperformance.
Even giants like Intel, Google, and Amazon faced repeated setbacks in chip development.
If XPU fails, OpenAI could face heavy losses without achieving independence.
Strategic Implications
This move is not just about “building a chip.” It’s about reshaping the global AI power balance:
A strategic bid for computing dominance
A direct challenge to NVIDIA’s monopoly
A step toward OpenAI becoming not only an AI software powerhouse but also a semiconductor player
When XPU enters mass deployment in 2026, it could mark a historic turning point in the AI industry.
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Part 4. Impact on the South Korean Stock Market
OpenAI’s XPU project is not just a U.S. tech story. The ripple effects extend to South Korea, whose economy is deeply tied to global semiconductor and AI infrastructure demand.
1) Samsung Electronics & SK hynix
NVIDIA’s dominance has boosted Korean firms through the HBM (High Bandwidth Memory) boom. SK hynix, for instance, reported record profits in 2024 from HBM3E supply.
However, if OpenAI’s XPU reduces reliance on GPU+HBM structures, memory demand patterns could shift. Still, given the explosive overall growth in AI workloads, analysts expect long-term opportunities to remain positive for Korean chipmakers.
2) AI Server & Data Center Stocks
XPU adoption means more data center expansion. Korean firms producing server components—like power supply units, cooling solutions, PCBs, and networking equipment—stand to benefit. Companies such as LS ELECTRIC, Hanmi Semiconductor, and ISU Petasys may see increased demand as AI infrastructure scales globally.
3) Investor Sentiment
Signals of weakening NVIDIA dominance could reshape investor sentiment in Korea. “NVIDIA-theme stocks” may face volatility, while a new narrative—“AI chip diversification beneficiaries”—could boost interest in Korean firms with foundry, memory, and packaging capabilities.
4) Long-Term Opportunities
Korean companies have historically collaborated with U.S. tech giants on chip development. If Samsung secures foundry contracts or SK hynix provides optimized memory for OpenAI’s XPU, it could create strong upward momentum in Korean equities.
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Final Takeaway
Short-term: Increased volatility for NVIDIA-linked stocks
Mid-term: Growth opportunities for Korean server, data center, and networking firms
Long-term: Potential breakout momentum if Samsung or SK hynix becomes part of OpenAI’s chip ecosystem
OpenAI’s XPU project is therefore not just an overseas headline—it is a direct market variable for Korean investors, carrying both opportunities and risks.