Broadcom's stock has surged following the announcement of a $10 billion order for its custom AI chips, with speculation pointing to OpenAI as the client. The deal involves Broadcom co-designing AI chips, known as XPUs, for OpenAI, potentially reducing the latter's reliance on Nvidia. These chips are slated for internal use by OpenAI, with shipments expected to commence in 2026.
CEO Hock Tan's leadership continuity, extending until at least 2030, has further boosted investor confidence. Broadcom's AI semiconductor revenue is projected to reach $6.2 billion in the next quarter, marking sustained growth in the AI sector. The company's strategy of providing custom silicon to cloud giants seeking alternatives to Nvidia's GPUs is gaining traction.
Analysts suggest that this deal signifies a strategic shift, with major tech firms increasingly turning to custom chips to manage AI workloads. Broadcom's success in securing this substantial order underscores its growing influence in the AI hardware market.
