OpenAI to Produce First AI Chip with TSMC’s 3nm Technology

OpenAI is progressing in its plan to develop custom AI chips to reduce the reliance on NVIDIA. According to a report, the company is preparing to finalise the design of its first in-house chip in the coming months and intends to send it for fabrication at TSMC (Taiwan Semiconductor Manufacturing Company).

The process, known as “taping out,” marks a key step before production. OpenAI expects to begin mass production in 2026. 

“The training-focused chip is viewed as a strategic tool to strengthen OpenAI’s negotiating leverage with other chip suppliers,” the report stated. The company plans to improve its processors over multiple iterations.

Richard Ho, formerly of Google, leads OpenAI’s chip team, which has grown to 40 members. The project also involves collaboration with Broadcom.

Tech companies such as Microsoft and Meta have faced challenges in producing AI chips. OpenAI’s initiative follows broader industry efforts to reduce dependence on NVIDIA, which controls around 80% of the AI chip market. 

Microsoft and Meta have announced AI infrastructure investments of $80 billion and $60 billion, respectively, for the coming year. The chip is designed for training and running AI models but will be initially deployed on a limited scale. 

Expanding to the scale of Google or Amazon’s AI chip programs would require OpenAI to hire significantly more engineers.

TSMC will manufacture OpenAI’s chip using 3-nm process technology. The design, similar to NVIDIA's chips, includes a systolic array architecture, high-bandwidth memory, and advanced networking features.

OpenAI, along with Oracle, SoftBank, NVIDIA, and Microsoft, recently announced the Stargate Project to build AI infrastructure in the US with a planned investment of up to $500 billion over four years, starting with an initial deployment of $100 billion.