Why everyone from OpenAI to SpaceX is building their own chips (and turning up the heat on Nvidia)
A wave of hyperscalers and tech titans — OpenAI, Google, Apple, SpaceX — are designing their own custom AI chips, chipping away at Nvidia's monopoly-like grip on inference and training compute. The structural shift raises the question of whether Broadcom and peer ASIC players become the primary beneficiaries while Nvidia faces long-term share erosion at its highest-margin customers.
What happened
A wave of hyperscalers and tech titans — OpenAI, Google, Apple, SpaceX — are designing their own custom AI chips, chipping away at Nvidia's monopoly-like grip on inference and training compute.
The read · Jun 26
NVDA's monopoly-premium valuation meets a structural threat from custom ASICs, while AVGO's co-development role with OpenAI and others positions it as the pick-and-shovel play — the question is whether this is a near-term catalyst for AVGO or merely a slow-burn headwind for NVDA.
Wrong if
Nvidia's CUDA moat and Blackwell/Rubin training dominance could sustain GPU demand longer than expected, compressing the pair spread; additionally, custom chip tape-out delays (a common occurrence) could push Jalapeño and similar programs 12-18 months out, extending Nvidia's runway and killing the near-term thesis.
CoverageSource: TechCrunch · Published here FRI, JUN 26 · 1:43 PM ET · the only report in this recordHow this is decided →
The chart · NVDATradingView · third-party feed, not the Wire’s licensed closes
🔒 Click to interact · scroll moves the page
The story1 min read
The TechCrunch piece captures a well-telegraphed but now accelerating trend: the largest AI spenders are actively de-risking their dependence on Nvidia by commissioning custom silicon. OpenAI's 'Jalapeño' inference chip, co-developed with Broadcom, is the latest high-profile example, joining Google's TPUs, Apple's Neural Engine lineage, and SpaceX's in-house compute ambitions. These are not fringe experiments — they represent the very customers who account for an outsized slice of Nvidia's GPU revenue.
Nvidia's numbers remain extraordinary — $215.9B in revenue, up 65.5% YoY, with 71.1% gross margins. That kind of financial profile reflects a monopoly premium baked in. The risk is not that Nvidia loses the market tomorrow, but that as custom ASICs absorb incremental inference workloads, Nvidia's growth rate decelerates faster than consensus models anticipate. The bear case is a valuation re-rating, not a revenue collapse.
Broadcom is the clearest near-term beneficiary. At $63.9B in revenue (+23.9% YoY) and 67.8% gross margins, AVGO already generates significant AI custom chip revenue through its XPU/ASIC co-development partnerships. OpenAI's Jalapeño deal deepens that pipeline, and each new hyperscaler customer adds recurring, sticky revenue tied to multi-year chip roadmaps.
The bull/bear tension for NVDA centers on timing: Nvidia's CUDA ecosystem, software moat, and Blackwell/Rubin roadmap give it a multi-year lead in training workloads, where custom chips remain impractical for most players. But inference — the higher-volume, cost-sensitive workload — is exactly where custom ASICs are most competitive, and inference is where the next wave of AI spending is headed.
Watch for: any acceleration in hyperscaler capex commentary that explicitly mentions reduced GPU allocation per dollar spent; Broadcom's next earnings for AI revenue segment growth; and whether OpenAI's Jalapeño timeline slips (chip tape-outs frequently do), which would extend Nvidia's runway.
The read, in fullWhy it matters
The structural case for long AVGO / short NVDA rests on Broadcom's expanding custom ASIC pipeline — now including OpenAI's Jalapeño — gaining share of incremental AI inference capex that would otherwise flow to Nvidia GPUs. AVGO's 67.8% gross margins and 23.9% revenue growth show the AI business is already scaling, while NVDA's near-monopoly margin profile (71.1% gross) prices in continued dominance that custom silicon is actively eroding at the inference layer. The pair neutralizes broad semis beta while isolating the share-shift dynamic.
The arc● Open · no developments yet
· Published
The read above, as written. kept as written · closes shown from JUN 26 on
Next · what would move this
2-4 months, reassess on next AVGO and NVDA earnings. Follow to be told when one lands.
Since this story · named here, equal weight · 1D EOD+8.8%
JUN 26 · first close after publicationSEP 4
Price context does not establish that the story caused the move.
▲ The case it holds
AVGO's deepening co-development relationships — now including OpenAI — create a multi-year, recurring ASIC revenue stream at hyperscaler scale, and at 67.8% gross margins the AI segment increments are highly accretive to earnings.
▼ The case it breaks
Nvidia's CUDA software ecosystem and Blackwell architecture maintain an effectively unassailable lead in AI training workloads, meaning custom ASICs only address the inference margin — and NVDA's 65.5% YoY revenue growth suggests the addressable market is still expanding fast enough to absorb share loss without denting the stock's near-term earnings trajectory.
Kept as written · your side, if you take one, is graded privately against licensed closes after 10 trading days · nothing here is advice · How the Wire is made →
READER EVIDENCEOpens with the recordFollow the story to be told when it moves.
More on the Wire
Investing.com · SAT, SEP 5 · 5:56 AM ET
Shares a name with this story — discovery, not a connection.
The memory
This page is kept as it was written on Jun 26. Later coverage joins it only when the company and catalyst evidence match, and what the stock did is shown from licensed end-of-day closes — never re-graded, never backdated. The judgment is yours.