OpenAI’s AI chip deal with Broadcom (AVGO) hits USD 18bln financing snag, via The Information
- Negotiations have run into a potential problem. Broadcom has said it would finance the first phase only if Microsoft agrees to buy roughly 40% of the chips, an OpenAI executive told colleagues in a memo last month. ""
- "Microsoft would install the chips in its data centers and then rent them back to OpenAI."
- "A purchase commitment from Microsoft, one of the world’s most creditworthy companies with decades of data center experience, would give Broadcom confidence it would get its money back, said a person involved in the talks."
- "But Microsoft could choose not to buy OpenAI’s chips, which would change the financing terms for the project, the memo said."
Context
The financing snag in OpenAI’s AI chip deal with Broadcom highlights the critical dependency on Microsoft's commitment to purchase a significant portion of the chips. This situation introduces uncertainty to the financing structure and could derail the project if Microsoft decides against the purchase, impacting not only the involved companies but also the broader semiconductor and AI markets.
Trade the TapeGet this analysis live, the moment it breaksNewsquawk's real-time dashboard delivers market-moving headlines and instant context to your desk before the rest of the market reacts.
Open Dashboard#UNITED STATES#USD#EUR#JAPAN#JPY#UNITED KINGDOM#GBP#EUROPE#BROADCOM CORP#MICROSOFT CORP#MSFT.US#AVAGO TECHNOLOGIES LTD#AVGO.US#SOFTWARE#IMPORTANT#FOREX#EQUITIES#METALS#US SESSION#SYSTEMS SOFTWARE#SEMICONDUCTORS#METALS & MINING#SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (GROUP)#SOFTWARE & SERVICES#SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT#S&P 500 INDEX#NASDAQ 100 INDEX#BROADCOM INC#AVGO#DXY#OPEN AI#US EQUITIES#AI