OpenAI’s Chatting Up Broadcom For A Fresh Supply Chain Connection
10 months ago • 2 mins
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What’s going on here?
OpenAI is buddying up to Broadcom, roping in the semiconductor whiz to whip up a new chip that could help it stay ahead of the competition.
What does this mean?
The mastermind behind ChatGPT plans to put some space between itself and the uber-popular Nvidia, broadening its circle of friends across the supply chain. After all, the name of the AI game is capacity – whether that’s chips, energy, or computing. And though Broadcom’s tech may be no match for Nvidia’s right now, that could soon change. In the meantime, OpenAI’s playing like it’s multi-dimensional chess, widening its sphere of influence while launching new chatbot formats. Just this week, the firm debuted GPT-4o Mini: a smaller, 60% cheaper version of its flagship service. Until now, it’s been all about launching the biggest and baddest AI models – but smaller is useful too. Compact models can be more profitable for business clients using AI just for specific tasks.
Why should I care?
Zooming out: Princes or paupers.
Innovation is king in the AI race, and you can’t fit too many bottoms on the throne. Plus, those crowns don’t come cheap: investors are fretting over whether Big Tech’s eye-watering AI spending spree will ever pay off. The likes of Microsoft, Alphabet, and Amazon are betting massively on AI being the ultimate game-changer. And that’s led to the fastest and biggest infrastructure rollout in history – with more and more data center projects in the works. All the while, investors are still waiting for payoffs from virtual reality, the metaverse, and blockchain.
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The bigger picture: Showstoppers.
Understandably, some tech-weary investors have turned their beady eyes to smaller companies. That’s pushed the small-cap Russell 2000 index up over 9% in the past month. The real test will be whether those little guys can hold folks’ attention: earnings season is just kicking off, and superstar tech stocks have a way of stealing the spotlight.
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Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.
