01:39 PM EDT, 10/29/2024 (MT Newswires) -- (Updates with details throughout.)

Microsoft ( MSFT )-backed (MSFT) OpenAI has dropped plans to build its own foundry and is working with Broadcom ( AVGO ) and Taiwan Semiconductor Manufacturing Co. ( TSM ) to build a chip designed to support artificial intelligence systems, Reuters reported Tuesday, citing sources.

The ChatGPT maker had intended to build a network of factories known as foundries as part of a push to manufacture everything in-house but has foregone those plans due to time and cost considerations, the report said.

Instead, the company is reportedly focusing on designing chips in-house and plans to partner with others to diversify chip supply and reduce costs.

OpenAI has secured manufacturing capacity with TSMC through Broadcom ( AVGO ) to make its first custom-designed chip in 2026, though the timeline could change, Reuters reported.

OpenAI was utilizing Advanced Micro Devices ( AMD ) chips on top of Nvidia ( NVDA ) infrastructure to meet its demands, according to the report.

Microsoft ( MSFT ), OpenAI, Broadcom ( AVGO ), TSMC, Nvidia ( NVDA ), and AMD did not immediately respond to requests for comment from MT Newswires.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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