The AI chip gold rush has a new star beyond Nvidia. Broadcom’s AI revenue more than doubled in its latest quarter to $10.8 billion, with the company forecasting it will climb toward $16 billion next quarter, as demand for custom AI chips from the biggest model-makers explodes. The surge highlights how purpose-built silicon — and a persistent supply crunch — are shaping the AI buildout.
Revenue doubles
The growth is staggering. Broadcom’s AI revenue more than doubled to $10.8 billion in the second quarter, and the company expects it to triple year-over-year, reaching about $16 billion in the current quarter. The results cement Broadcom as a major beneficiary of the AI infrastructure boom.
The marquee customers
The client list is elite. Broadcom counts six core custom-chip customers, including Anthropic, Google, Meta and OpenAI, all designing bespoke silicon to run their AI workloads. As these firms seek alternatives and complements to off-the-shelf GPUs, Broadcom’s custom-chip business has become a critical supplier.
Custom over off-the-shelf
Tailored chips are winning share. The biggest AI players increasingly want silicon optimized for their specific models and infrastructure, rather than relying solely on general-purpose GPUs. Broadcom’s role designing these custom accelerators positions it at the heart of the industry’s compute strategy.
The supply crunch
Demand outstrips supply. Chip production has become a binding constraint on the AI buildout, with TSMC’s CEO signaling that supply won’t meet demand until 2027. The scarcity underscores how the race for compute is limited not just by money but by the physical capacity to make advanced chips.
Policy pressures
Regulation looms over the sector. New U.S. rules have shifted chip export reviews and imposed tariffs on advanced AI chips, while the EU’s AI Act becomes fully enforceable in August. The policy backdrop adds complexity for chipmakers navigating booming demand and tightening oversight.
Why it matters
Chips are the foundation of AI. Broadcom’s surge signals that custom silicon is central to the AI economy and that demand remains insatiable, even as supply lags. The health of chip suppliers is a key barometer for whether the AI boom can keep scaling at its current breakneck pace.
The bottom line
Broadcom’s AI revenue more than doubled to $10.8 billion, with $16 billion forecast next quarter, driven by custom-chip demand from Anthropic, Google, Meta and OpenAI amid a supply crunch lasting into 2027. As bespoke silicon takes center stage, Broadcom has emerged as a pillar of the AI buildout — and a sign of demand that shows no sign of cooling.
Photo: EU-Ukraine cooperation / BY-SA via flickr