Key Points
Broadcom (NASDAQ: AVGO) has extended its deal with Meta Platforms (NASDAQ: META) to develop custom AI chips, with an initial commitment of 1 gigawatt of chips running through 2029. This partnership marks a significant step in Meta’s AI technology roadmap, with Broadcom CEO Hock Tan transitioning to an advisory role in the collaboration.
Recently, Meta has also unveiled four generations of custom MTIA (Meta Training and Inference Accelerator) chips, with the first model already operational for ranking and recommendations. Broadcom’s custom chip business, pivotal in powering Meta’s initiatives, is set to contribute to an anticipated revenue of $100 billion from custom AI chips by fiscal 2027, alongside existing orders worth $21 billion for 2025.
In addition, Broadcom has expanded its partnership with Alphabet to develop future Tensor Processing Units (TPUs) and will supply Anthropic with an additional 3.5 gigawatts of chips starting in 2027. These strategic moves underscore Broadcom’s leading position in AI chip manufacturing, essential for meeting the growing demand of large data centers.
