AI Chip

Semiconductor stocks rebounded strongly, spurred by OpenAI’s custom AI chip deal with Broadcom and signals of easing US-China tensions. Broadcom shares surged 10% on the news, while the VanEck Semiconductor ETF (SMH) jumped 4%. Nvidia, Taiwan Semiconductor (TSM), and Micron Technology saw significant gains. The rally reversed Friday’s losses driven by tariff concerns, with Trump alleviating anxieties regarding US-China relations. The OpenAI-Broadcom deal underscores the increasing demand for specialized AI hardware, reshaping the semiconductor landscape.

AMD’s stock surged following OpenAI’s announcement of increased procurement of AMD’s AI hardware, signaling a challenge to Nvidia’s dominance. OpenAI may acquire up to a 10% stake in AMD based on performance milestones. AMD’s market cap is $380 billion, marking its best weekly gain since 2016. AMD CEO Lisa Su emphasized the scalable nature of its AI chips. Nvidia CEO Jensen Huang described OpenAI’s potential equity stake in AMD as “surprising”, acknowledging increased competition.

Nvidia CEO Jensen Huang expressed surprise at AMD’s strategy to grant OpenAI warrants representing a 10% stake in exchange for a multi-year purchase commitment of 6 gigawatts of AMD’s computing power. Huang highlighted the unconventional nature of the deal, contrasting it with Nvidia’s plan to invest $100 billion directly into OpenAI. He emphasized Nvidia’s ability to sell directly to OpenAI and noted OpenAI will need to raise capital to fund the Nvidia deal.

Alibaba’s Hong Kong shares surged over 19% driven by strong cloud computing results and AI chip development news. Cloud revenue grew 26% YoY, fueled by AI services, with AI-related product revenue experiencing triple-digit growth for the eighth consecutive quarter. The company’s investments in AI and its entrance into China’s competitive “instant commerce” market are viewed favorably despite temporary earnings pressure. Overall, positive sentiment followed a solid earnings report with significant net income increase and promising e-commerce revival signs.

Nvidia is actively pursuing strategies to maintain its presence in the Chinese market despite potential losses from the halted H20 chip. CEO Jensen Huang confirmed ongoing discussions with the U.S. government regarding exporting a more advanced chip. Reports suggest Nvidia is developing a new AI chip, B30A, tailored for China, potentially exceeding H20’s performance. This follows Huang’s expressed desire to sell more advanced chips there. These efforts come amidst security concerns raised in China regarding potential vulnerabilities in Nvidia chips, which the company denies.

Nvidia is reportedly developing a new AI chip, the B30A, for China, aiming to outperform its current H20 offering while complying with US export controls. Utilizing its Blackwell architecture with a single-die design, the B30A is expected to have roughly half the performance of the B300. Nvidia is also purportedly creating an RTX6000D chip for AI inference in China. These moves reflect Nvidia’s strategy to maintain a presence in the critical Chinese market amid US-China trade tensions and regulatory scrutiny. Samples of the B30A may be sent next month.