Broadcom's AI Revenue Is Growing at 221%. Here's Why Custom Chips Could Be a Bigger Business Than GPUs.
There's an overlooked reason why custom chips could keep taking share of AI data centers.
Overview
Broadcom (NASDAQ: AVGO) grew its artificial intelligence semiconductor revenue by 221% year over year in the third quarter, and that growth could accelerate in the fourth quarter. Management's outlook calls for $21.7 billion worth of AI-related revenue, up 236% from a year ago.
There's a clear driver behind that revenue -- custom AI accelerators, or what management calls XPUs. These chips are designed in partnership with hyperscalers, including Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Meta Platforms (NASDAQ: META), Anthropic, and OpenAI. And while Nvidia (NASDAQ: NVDA) and its GPUs have been the workhorse of AI training and inference, custom semiconductor chips could end up being a much bigger business.
Details
Here's why and what it means for both Broadcom and its customers.
Source
Originally published at www.fool.com.