Artificial Intelligence
OpenAI & Broadcom’s AI Chips, Cadence’s $3.16B Hexagon D&E Deal & Tariff Woes
Updated on Fri, Sep 5, 2025
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The competition in the artificial intelligence (AI) industry is extremely fierce, as businesses around the world are trying to infuse the most powerful and potent generative artificial intelligence (GenAI) capabilities throughout their operations.
As a result, AI companies notice that they must develop and deploy upgraded models before their rivals can beat them to the punch.
However, in order to do so, they require the most powerful and potent infrastructure, putting the onus of continual development and deployment on AI infrastructure companies as well.
Hence, the world has been turning to NVIDIA, a seasoned manufacturer of graphics processing units (GPUs), a vital component in the training and operation of AI models.
GPUs are of such importance that NVIDIA became the first ever publicly traded company to breach the $4 trillion mark by market capitalization in July 2025. Interestingly, the company first crossed the $1 trillion mark just over a year before, in May 2023. Around nine months after hitting its first trillion, NVIDIA made it to $2 trillion in February 2024. The $3 trillion milestone came around three months later, in June 2024.
In fact, experts also believe that NVIDIA could soon breach the $5 trillion mark, while a recent study by Barrons notes that NVIDIA can hit $1 trillion in annual revenue in just five years, i.e., by 2025.
Suffice it to say, GPUs are a popular product right now and are expected to be so for the foreseeable future.
This increased demand is seeing a rise in new GPU manufacturers, while existing chipmakers are making various moves to improve their offerings and take on market leaders such as NVIDIA.
Either way, acquiring a large number of GPUs—which is what AI companies require—becomes an excessively pricey affair. Which is why they are turning to manufacturers to develop and deploy their own chips in-house.
Currently, tech giants such as Google, Amazon, and Meta have built custom chips to power their AI ambitions—and this is what OpenAI plans to do with Broadcom.
OpenAI is on track to develop its own AI chip for the first time next year.
The chip will be co-designed by Broadcom and is expected to be deployed next year, according to a report by the Financial Times, which cited multiple people familiar with the partnership between the two companies.
Broadcom, in its own words, is a global technology leader that designs, develops, and supplies a broad range of semiconductors, enterprise software, and security solutions.
The plan, which was first reported late last year, gained more traction now as Broadcom announced the financial results of its third quarter fiscal year 2025, where the company’s President and CEO, Hock Tan, spoke about an unnamed new customer who committed to orders worth $10 billion.
“We expect growth in AI semiconductor revenue to accelerate to $6.2 billion in Q4, delivering eleven consecutive quarters of growth, as our customers continue to strongly invest,” added Tan.
Tan also revealed that Broadcom had attracted a fourth major customer for its AI chips, but didn’t disclose any names.
OpenAI plans to make these chips available to external customers, as opposed to an initial plan to deploy them internally only.
Cadence Design Systems, a leader in AI and digital twin technology that boasts customers such as NVIDIA, Qualcomm, and other major chipmakers, announced that it has entered into a definitive agreement to acquire Hexagon’s Design & Engineering (D&E) unit, including its MSC Software business—a pioneer in engineering simulation and analysis solutions.
Cadence offers electronic computer-aided design software that helps manufacturers design chips and verify they’re bug-free.
Hexagon’s D&E business is known for flagship products such as MSC Nastran and Adams, which are key to the design and validation of complex mechanical systems, especially in sectors that rely on performance, precision, and reliability, such as aerospace and automotive.
The move would help Cadence deliver more comprehensive solutions to its customers, while also bringing it a bigger customer base, spanning names such as Volkswagen Group, BMW, Toyota, Lockheed Martin, BAE and Boeing.
“By adding Hexagon’s D&E world-class simulation capabilities, we will expand our vision of Intelligent System Design to encompass the full spectrum of physical behavior—from electromagnetics and fluids to structures and motion,” said Anirudh Devgan, Cadence’s President and CEO. “This will be a pivotal step in enabling our customers to design the complex, converged systems of tomorrow.”
As per the agreement, Cadence will shell out around €2.7 billion or $3.16 billion, where 70% will be paid in cash and 30% will include the issuance of Cadence common stock to Hexagon. However, if the deal doesn’t go through, Cadence will be required to pay a reverse termination fee of up to €175 million or $205 million.
The deal is expected to close in the first quarter of 2026 and is subject to regulatory approvals and customary closing conditions.
All these developments come as the global chips market is marred by massive uncertainty.
There is no question that the United States is leading the AI race, especially when it comes to nations with the greatest number of companies providing the most powerful infrastructure.
However, the country is wary of competition from other countries, namely China, which is why the government imposed strict trade restrictions disallowing the sale of the most powerful NVIDIA GPUs to Chinese companies, directly or indirectly.
Since then, the U.S. government has reconsidered its stance, loosening the severe restrictions it had imposed on advanced NVIDIA chip sales. NVIDIA also backed this play, as customers wouldn’t switch to rival GPUs and accompanying software tools.
At the same time, the Chinese government took measures by instructing companies in the country to avoid purchasing from sector leader NVIDIA, yet several companies are still keen on acquiring NVIDIA’s GPUs.
Ahead of this, in a bid to improve the country's economy and boost jobs, President Trump has also introduced a series of tariffs on various countries around the world.
Now, reports suggest that the President is considering implementing tariffs for imports from companies that aren’t shifting their production to the U.S. However, he didn’t provide an exact date or rate for the tariffs.
A few weeks ago, the President spoke about the vitality of growing jobs in the country, which is why companies moving operations and production to the country wouldn’t be subject to tariffs.
“Yeah, I have discussed it with the people here. Chips and semiconductors—we will be putting tariffs on companies that aren't coming in. We will be putting a tariff very shortly,” said President Trump. “We will be putting a very substantial tariff, not that high, but fairly substantial tariff with the understanding that if they come into the country, if they are coming in, building, planning to come in, there will not be a tariff,” he added.
On the flip side, the tariff talk has begun hurting U.S. companies. Texas Instruments, a renowned name in the sector, said that demand for its chips had reduced, following a spike in the month of April, as customers rushed to secure products before being impacted by tariffs. As such, the company's shares slipped nearly 4%.
Do you think the U.S. is fair in imposing trade restrictions and tariffs on advanced technology products?
Do you think OpenAI’s chips could chip away at NVIDIA’s market share?
Let us know in the comments below!
As a result, AI companies notice that they must develop and deploy upgraded models before their rivals can beat them to the punch.
However, in order to do so, they require the most powerful and potent infrastructure, putting the onus of continual development and deployment on AI infrastructure companies as well.
Hence, the world has been turning to NVIDIA, a seasoned manufacturer of graphics processing units (GPUs), a vital component in the training and operation of AI models.
GPUs are of such importance that NVIDIA became the first ever publicly traded company to breach the $4 trillion mark by market capitalization in July 2025. Interestingly, the company first crossed the $1 trillion mark just over a year before, in May 2023. Around nine months after hitting its first trillion, NVIDIA made it to $2 trillion in February 2024. The $3 trillion milestone came around three months later, in June 2024.
In fact, experts also believe that NVIDIA could soon breach the $5 trillion mark, while a recent study by Barrons notes that NVIDIA can hit $1 trillion in annual revenue in just five years, i.e., by 2025.
Suffice it to say, GPUs are a popular product right now and are expected to be so for the foreseeable future.
This increased demand is seeing a rise in new GPU manufacturers, while existing chipmakers are making various moves to improve their offerings and take on market leaders such as NVIDIA.
Either way, acquiring a large number of GPUs—which is what AI companies require—becomes an excessively pricey affair. Which is why they are turning to manufacturers to develop and deploy their own chips in-house.
Currently, tech giants such as Google, Amazon, and Meta have built custom chips to power their AI ambitions—and this is what OpenAI plans to do with Broadcom.
OpenAI And Broadcom’s AI Chips
OpenAI is on track to develop its own AI chip for the first time next year.
The chip will be co-designed by Broadcom and is expected to be deployed next year, according to a report by the Financial Times, which cited multiple people familiar with the partnership between the two companies.
Broadcom, in its own words, is a global technology leader that designs, develops, and supplies a broad range of semiconductors, enterprise software, and security solutions.
The plan, which was first reported late last year, gained more traction now as Broadcom announced the financial results of its third quarter fiscal year 2025, where the company’s President and CEO, Hock Tan, spoke about an unnamed new customer who committed to orders worth $10 billion.
“We expect growth in AI semiconductor revenue to accelerate to $6.2 billion in Q4, delivering eleven consecutive quarters of growth, as our customers continue to strongly invest,” added Tan.
Tan also revealed that Broadcom had attracted a fourth major customer for its AI chips, but didn’t disclose any names.
OpenAI plans to make these chips available to external customers, as opposed to an initial plan to deploy them internally only.
Cadence Buys Hexagon's Design And Engineering Arm
Cadence Design Systems, a leader in AI and digital twin technology that boasts customers such as NVIDIA, Qualcomm, and other major chipmakers, announced that it has entered into a definitive agreement to acquire Hexagon’s Design & Engineering (D&E) unit, including its MSC Software business—a pioneer in engineering simulation and analysis solutions.
Cadence offers electronic computer-aided design software that helps manufacturers design chips and verify they’re bug-free.
Hexagon’s D&E business is known for flagship products such as MSC Nastran and Adams, which are key to the design and validation of complex mechanical systems, especially in sectors that rely on performance, precision, and reliability, such as aerospace and automotive.
The move would help Cadence deliver more comprehensive solutions to its customers, while also bringing it a bigger customer base, spanning names such as Volkswagen Group, BMW, Toyota, Lockheed Martin, BAE and Boeing.
“By adding Hexagon’s D&E world-class simulation capabilities, we will expand our vision of Intelligent System Design to encompass the full spectrum of physical behavior—from electromagnetics and fluids to structures and motion,” said Anirudh Devgan, Cadence’s President and CEO. “This will be a pivotal step in enabling our customers to design the complex, converged systems of tomorrow.”
As per the agreement, Cadence will shell out around €2.7 billion or $3.16 billion, where 70% will be paid in cash and 30% will include the issuance of Cadence common stock to Hexagon. However, if the deal doesn’t go through, Cadence will be required to pay a reverse termination fee of up to €175 million or $205 million.
The deal is expected to close in the first quarter of 2026 and is subject to regulatory approvals and customary closing conditions.
Tariff Woes
All these developments come as the global chips market is marred by massive uncertainty.
There is no question that the United States is leading the AI race, especially when it comes to nations with the greatest number of companies providing the most powerful infrastructure.
However, the country is wary of competition from other countries, namely China, which is why the government imposed strict trade restrictions disallowing the sale of the most powerful NVIDIA GPUs to Chinese companies, directly or indirectly.
Since then, the U.S. government has reconsidered its stance, loosening the severe restrictions it had imposed on advanced NVIDIA chip sales. NVIDIA also backed this play, as customers wouldn’t switch to rival GPUs and accompanying software tools.
At the same time, the Chinese government took measures by instructing companies in the country to avoid purchasing from sector leader NVIDIA, yet several companies are still keen on acquiring NVIDIA’s GPUs.
Ahead of this, in a bid to improve the country's economy and boost jobs, President Trump has also introduced a series of tariffs on various countries around the world.
Now, reports suggest that the President is considering implementing tariffs for imports from companies that aren’t shifting their production to the U.S. However, he didn’t provide an exact date or rate for the tariffs.
A few weeks ago, the President spoke about the vitality of growing jobs in the country, which is why companies moving operations and production to the country wouldn’t be subject to tariffs.
“Yeah, I have discussed it with the people here. Chips and semiconductors—we will be putting tariffs on companies that aren't coming in. We will be putting a tariff very shortly,” said President Trump. “We will be putting a very substantial tariff, not that high, but fairly substantial tariff with the understanding that if they come into the country, if they are coming in, building, planning to come in, there will not be a tariff,” he added.
On the flip side, the tariff talk has begun hurting U.S. companies. Texas Instruments, a renowned name in the sector, said that demand for its chips had reduced, following a spike in the month of April, as customers rushed to secure products before being impacted by tariffs. As such, the company's shares slipped nearly 4%.
Do you think the U.S. is fair in imposing trade restrictions and tariffs on advanced technology products?
Do you think OpenAI’s chips could chip away at NVIDIA’s market share?
Let us know in the comments below!
First published on Fri, Sep 5, 2025
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