Semiconductor shares rebounded sharply on Monday, recovering from Friday’s steep selloff, after OpenAI and Broadcom announced a new artificial intelligence chip partnership and tensions between the US and China appeared to ease.
The VanEck Semiconductor ETF jumped nearly 4%, while Nvidia and Advanced Micro Devices each climbed more than 3%.
Taiwan Semiconductor and On Semiconductor surged about 6% each, and Micron Technology advanced more than 4%.
Broadcom led the rally with a 9% gain following its announcement with OpenAI.
Over the weekend, US President Donald Trump attempted to reassure markets about China, writing on Truth Social that it “will all be fine.”
His comments came after Friday’s global market rout triggered by his threat of “massive tariffs” on Chinese imports in response to Beijing’s new restrictions on rare earth exports.
Trump later pledged to impose tariffs of 100% on Chinese imports starting November 1, and said his administration would implement export controls on “any and all critical software.”
The tech-heavy selloff wiped out an estimated $770 billion in market capitalisation from major technology firms on Friday.
OpenAI, Broadcom partner to build custom AI accelerators
OpenAI and Broadcom said Monday that they are jointly developing and deploying 10 gigawatts of custom artificial intelligence accelerators, marking one of the most ambitious hardware collaborations in the industry to date.
The companies have been working together for 18 months, but are now making the partnership public, outlining plans to begin rolling out racks of OpenAI-designed chips built on Broadcom technology starting late next year.
OpenAI has surpassed 800 million weekly active users, reflecting strong adoption across global enterprises, small businesses, and developers.
The company said the collaboration will further its mission to ensure that artificial general intelligence benefits all of humanity.
Financial details of the agreement were not disclosed.
Broadcom’s shares climbed 9% on the news, reflecting investor optimism around the expanding AI hardware ecosystem.
Expanding AI infrastructure ambitions
The collaboration with Broadcom adds to a growing list of OpenAI partnerships aimed at securing the compute capacity required for its expanding AI models.
In recent weeks, the Sam Altman-led company has also announced major deals with Nvidia, Oracle, and AMD.
“These things have gotten so complex you need the whole thing,” OpenAI CEO Sam Altman said in a podcast released alongside the announcement, featuring executives from both companies.
The new systems — incorporating networking, memory, and compute — are designed specifically for OpenAI’s workloads and built on Broadcom’s Ethernet stack.
By developing its own chips, OpenAI aims to reduce compute costs and stretch infrastructure spending more efficiently.
Industry estimates suggest that a single 1-gigawatt data center can cost around $50 billion, with approximately $35 billion typically allocated to chips, based on Nvidia’s current pricing.
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