Broadcom just signed a massive deal to keep the AI boom moving. On Monday, the chip designer announced it will build the next generation of artificial intelligence chips for Google. At the same time, it is expanding its partnership with Anthropic, the startup behind the popular Claude AI. This new agreement gives Anthropic a huge boost in computing power to handle its growing fan base.
The scale of this deal is hard to wrap your head around. Anthropic will now have access to 3.5 gigawatts of computing capacity, all powered by Google’s specialized AI processors. Broadcom plays a secret but vital role here because it helps Google actually manufacture these chips. Investors liked the news, sending Broadcom’s stock up 3% right after the filing became public.
This move comes as Anthropic experiences explosive growth. The company’s revenue jumped from $9 billion late last year to over $30 billion today. Its Claude app even became the most downloaded free app in the U.S. back in February. Right now, more than 1,000 big businesses spend at least $1 million a year to use Anthropic’s tools, which is double what it was just two months ago.
Anthropic’s finance chief, Krishna Rao, said this partnership is all about staying at the “frontier” of AI. Most of the new machines and data centers will sit right here in the U.S. to ensure things run fast and secure. Analysts think this will be a gold mine for Broadcom, potentially bringing in $21 billion in revenue this year and doubling that by 2027.
But Broadcom isn’t just sticking with one partner. The company is also working with OpenAI, the creator of ChatGPT, to build custom silicon chips. Both Anthropic and OpenAI are trying to find ways to build their own hardware so they don’t have to rely entirely on expensive parts from other suppliers like Nvidia.
Even as they build custom chips, these AI giants are still buying everything they can find. OpenAI recently committed to using a massive amount of AMD’s graphics chips to keep its services running. As the race to build the smartest AI heats up, the battle is moving from software code to the physical chips and power grids that make it all possible.
