Source: The Information
OpenAI is outsourcing its infrastructure risk to chipmakers and cloud providers through a three-party arrangement where Broadcom finances chip production contingent on Microsoft pre-committing to purchase 40% of output. The structure inverts traditional vendor relationships by making the chip supplier bear manufacturing risk while a cloud giant guarantees demand. AI labs are using their compute leverage to lock in supply chains without capital expenditure, effectively forcing Broadcom to fund OpenAI's infrastructure expansion in exchange for a captive customer base. The deal architecture matters more than the dollar figure: control over custom silicon—not just access to it—has become a primary competition vector in AI, and Microsoft's commitment to buy chips signals its own exposure to OpenAI's growth trajectory.