OpenAI’s Jalapeño AI chip brings new 'threat' to Nvidia margins as custom silicon gains ground

Nvidia's near-monopoly over the most advanced AI chips is under "threat" as OpenAI's and other tech giants announce custom-built semiconductors, analysts told CNBC.

OpenAI announced that its first AI chip, the Jalapeño, had "industry-leading speed and efficiency," as it unveiled the semiconductor on Tuesday. Google, AWS and Meta are all also developing their own AI chips.

Nvidia has seen its share price rocket amid the data center buildout, which has created huge demand for its chips in both model training and inference: how AI systems run day-to-day tasks.

But hyperscalers and AI companies are increasingly gaining ground in developing their own silicon to power AI systems.

The Jalapeño chip, designed for inference, shows that a "hyperscaler-designed chip can now match or beat Nvidia's Blackwell-class GPUs on inference efficiency," Adrien Sanchez, technology analyst at Yole Group, told CNBC.

He added that, while Nvidia still owns the "vast majority" of AI compute and has ecosystem lock-in to its software platform CUDA, OpenAI's new chip is a "threat to Nvidia's inference margins, which is the field growing the most at the moment."

Nvidia has been approached for comment.

OpenAI announced the first benchmarking results from its Jalapeño, saying it would allow users to get "faster responses, more responsive agents and more reliable access" as demand grows.