Broadcom and OpenAI unveiled Jalapeño, OpenAI's first custom AI chip, in just nine months—but major investors are quietly buying competitors like Micron and AMD instead.

What happened

Broadcom and OpenAI announced Jalapeño, a custom AI chip designed for large-language-model inference, which moved from design to manufacturing tape-out in nine months—the companies say the fastest such cycle ever in advanced semiconductors. OpenAI's own AI models helped speed up the design.

Why it matters

Broadcom's business model is to co-design custom chips for individual customers rather than sell off-the-shelf products like Nvidia. Jalapeño demonstrates the model can deliver a frontier chip quickly, giving every major AI lab a reason to design its own chip with Broadcom instead of only buying Nvidia GPUs. Performance per watt tested as substantially better than the current state of the art.

What to watch

Deployment is set for gigawatt-scale deployment with Microsoft and other partners starting late 2026. However, despite the win, AVGO's Chaikin Money Flow reads -0.006, signaling distribution (more money leaving than entering), while competitors Micron and AMD show positive accumulation; Wall Street remains unanimously bullish, with JPMorgan raising its price target to $580 from $500.