Broadcom to manufacture AI chips for Google, Anthropic
What's the story
Broadcom has announced a deal to manufacture next-generation artificial intelligence (AI) chips for tech giant Google. The company has also expanded its partnership with Anthropic, an AI start-up. The new agreement will provide Anthropic with around 3.5 gigawatts of computing power based on Google's AI processors. Following the announcement, Broadcom's shares saw a 3% increase in after-hours trading.
Growth trajectory
Anthropic's revenue skyrockets to $30 billion
Anthropic has witnessed a massive jump in its annualized revenue, which has now crossed $30 billion. The figure was only about $9 billion at the end of last year. The start-up also boasts over 1,000 business clients who are spending more than $1 million annually on its services. This is double the number of clients it had two months ago.
Strategic alliance
Rao highlights the significance of partnerships with Google, Broadcom
Krishna Rao, Anthropic's finance chief, emphasized the importance of their partnership with Google and Broadcom. He said it is a major step in their strategy to scale infrastructure. The new capacity will mainly be based in the US and will help Anthropic meet the growing demand from its expanding customer base. Rao also stressed that this collaboration would enable Claude (Anthropic's AI chatbot) to push the boundaries of AI development further.
Future projections
Broadcom's positive outlook for 2026 and beyond
During an earnings call last month, Broadcom's CEO Hock Tan revealed that the company is off to a good start in 2026 with Anthropic. He said they are providing one gigawatt of compute from Google's homegrown tensor processing units (TPUs). Looking ahead to 2027, Tan projected that this demand would exceed three gigawatts of compute power.
Revenue forecast
Mizuho analysts forecast substantial AI revenue growth for Broadcom
Following the earnings call, analysts at Mizuho led by Vijay Rakesh estimated that Broadcom would generate $21 billion in AI revenue from Anthropic in 2026 and $42 billion in 2027. This projection highlights the financial potential of these partnerships and the growing demand for advanced AI computing capabilities.