OpenAI has begun testing its first in-house AI chip, nicknamed Jalapeño, which is purpose-built for inference. The chip effort falls under Project Nexus, a collaboration between OpenAI and Broadcom announced in October 2025. The Jalapeño chip is being designed under Richard Ho and will be fabricated at TSMC using the 3nm manufacturing process. The first phase of Project Nexus targets 1.3 GW of compute power with an $18 billion price tag. Broadcom’s financial backing reportedly hinges on Microsoft purchasing roughly 40% of the chip’s output. Production timelines have shifted; initial batches were originally planned for late 2026 but are now expected in 2027. OpenAI is simultaneously partnering with Cerebras and also considering Nvidia and AMD as potential suppliers.