OpenAI unveils Jalapeño, its first custom AI chip developed with Broadcom

Jun 24, 2026

OpenAI and Broadcom have unveiled Jalapeño, OpenAI's first custom AI chip designed to run large language model inference workloads. Developed in a rapid nine-month window with assistance from OpenAI's own models, the chip aims to reduce inference costs by roughly 50% compared to standard GPUs. The move comes as OpenAI attempts to curb massive financial losses, which reached an operating deficit of $20.92 billion in 2025 due to soaring compute costs, while seeking to reduce its reliance on Nvidia.

Jalapeño chip technical specifications

▪The Jalapeño chip is being tested in OpenAI's labs with the GPT-5.3-Codex-Spark AI model and is operating at target power and performance.
▪Celestica will build the server systems, boards, and racks for the Jalapeño chips, which will be used exclusively by OpenAI.
▪Early testing of the Jalapeño chip shows cost savings of roughly 50% compared with typical AI graphics processing units.
▪OpenAI and Broadcom unveiled Jalapeño, a custom artificial intelligence chip designed specifically for large language model inference to run AI workloads faster and cheaper.

ASIC development timeline

▪Broadcom CEO Hock Tan stated that the Jalapeño chip will begin to ramp up in 2027 and go full tilt in the first half of 2028.
▪OpenAI and Broadcom completed the design of the Jalapeño chip in nine months, utilizing OpenAI's own AI models to accelerate the process.
▪OpenAI plans to begin initial deployment of the Jalapeño chip in data centers by the end of 2026, with a full rollout projected by late 2029.

OpenAI financial losses

▪OpenAI's research and development costs, driven largely by model training and serving infrastructure, accounted for $19.18 billion in 2025.
▪OpenAI paid Microsoft over $10.59 billion for research and development and compute infrastructure in 2025.
▪OpenAI generated $13.07 billion in revenue in 2025 but incurred $34 billion in total operational expenses, resulting in an operating loss of nearly $20.92 billion.

Existing chip partnerships

▪Nvidia finalized a $30 billion direct investment into OpenAI in February 2026, securing an agreement to deploy 10 gigawatts of computing systems.
▪Amazon invested $50 billion into OpenAI in February 2026, which included a commitment for OpenAI to use two gigawatts of AWS Trainium computing capacity over eight years.
▪OpenAI has signed agreements to use hardware from Advanced Micro Devices and Cerebras, the latter of which held its initial public offering in May 2026.

Global AI chip competition

▪ByteDance entered negotiations with Qualcomm in June 2026 to design custom application-specific integrated circuits for its data centers.
▪Google, Amazon, Meta, and Microsoft have developed their own custom AI accelerators, such as Google's TPUs, Amazon's Trainium, Meta's MTIA, and Microsoft's Azure Maia.
▪Chinese technology firms are developing custom AI hardware, including Alibaba's Zhenwu M890 chip and Huawei's upcoming Ascend 950DT chip.