In context: Big tech companies and AI startups still largely rely on Nvidia's chips to train and operate the most advanced AI models. However, that could change fast. OpenAI is spearheading a massive industry-wide effort to bring cheaper custom AI accelerators to market. If successful, this push could weaken Nvidia's dominance in the AI hardware space, pushing the company into a tougher market. OpenAI is nearing the launch of its first custom-designed AI chip. Reuters expects the company to send the chip design to TSMC in the coming months for validation before mass production begins in 2026. The chip has reached the tape-out stage, but OpenAI will likely need a significantly larger workforce to achieve full self-reliance in the AI accelerator market.The custom chip was designed by a "small" in-house team led by Richard Ho, who left Google to join OpenAI over a year ago. The 40-person team collaborated with Broadcom, a controversial company with a well-known track record for creating custom ASIC solutions. The two companies began negotiating a chip-focused partnership in 2024, with the ultimate goal of building new AI chips.Industry sources said OpenAI's design can both train and run AI models, but the company will initially use it in limited quantities for AI inferencing tasks only. TSMC will manufacture the final chip on its 3nm technology node, and OpenAI expects it to include a certain amount of high-bandwidth memory, like any other major AI (or GPU) silicon design.Despite playing a minor role in the company's infrastructure for the next few months, OpenAI's chip could become a significant disruptive force in the near future. The new design will need to pass the tape-out stage with flying colors first, and Ho's team will need to fix any hardware bugs discovered during the initial manufacturing tests.Many tech companies are actively working to replace Nvidia products with their own custom solutions for AI acceleration, but the GPU maker still holds around 80 percent of the market. Microsoft, Google, Meta, and other Big Tech giants are employing hundreds of engineers to solve the silicon problem, with OpenAI coming in last both in timing and workforce size. // Related StoriesSimply put, OpenAI will need much more than its small in-house team led by Richard Ho currently working on its AI chip prototype. Internally, the chip project is seen as a crucial tool for future strategic moves in the growing AI sector. While still waiting for design validation from TSMC, OpenAI engineers are already planning more advanced iterations for broader adoption.