Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), Marvell Technology (NASDAQ:MRVL), Taiwan Semiconductor Manufacturing Co (NYSE:TSM), and other semiconductor companies rebounded from their Friday selloff amid overall market strength following positive assurances from President Donald Trump over China trade relations.
In a Truth Social post, Trump advised against worrying about China, stating that the situation would be fine. He described President Xi as highly respected but experiencing a temporary setback and emphasized that neither leader wants a depression in China. He added that the U.S. aims to help China, not harm it.
Also Read: Nvidia’s Core Approach Is Enabling Broader AI Industry: Analyst
The industry also got a boost from a deal with two significant companies, which have been pivotal in adding value to the sector.
OpenAI ramped up its dominance in artificial intelligence with a massive $500 billion chip initiative in partnership with Broadcom (NASDAQ:AVGO). The company behind ChatGPT signed a multibillion-dollar agreement with Broadcom to co-design custom AI chips, forming one of the most extensive semiconductor procurement campaigns ever. The deal, valued between $350 billion and $500 billion, expands OpenAI’s total chip capacity plans to over 26 gigawatts—equivalent to the output of 26 nuclear reactors.
OpenAI CEO Sam Altman said the company spent 18 months working with Broadcom to develop silicon optimized for AI inference, the process that powers its AI models.
This Broadcom deal complements OpenAI’s recent agreements with Nvidia and AMD, further expanding its AI hardware arsenal. In September, OpenAI secured a 10-gigawatt commitment from Nvidia, and in the same month, it added six gigawatts from AMD. Nvidia’s involvement includes a $100 billion equity investment in OpenAI, while AMD will provide up to six gigawatts of Instinct GPUs and up to 160 million performance-linked shares, potentially worth $75 billion.
OpenAI plans to fund over $1.5 trillion in semiconductor and infrastructure investments over the next decade, including $300 billion in data center expansions with Oracle (NYSE:ORCL).
For context, the semiconductor industry has been impacted by intensifying geopolitical tensions between Washington and Beijing, including sanctions on semiconductor technology (including AI technology) by the United States, followed by China’s retaliation, which included sanctions on rare earth exports to the U.S.
In the first week of October, Nvidia became the first company to reach a $4.5 trillion cap as aggressive Big Tech giants continue to fuel demand for Nvidia’s graphics processing units.
PHLX Semiconductor Index gained over 34% year-to-date, topping the Nasdaq 100 Index’s over 17% returns.
NVDA Price Action: NVDA shares were up 2.80% at $188.25 at the time of publication on Monday.
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