Broadcom Inc. (NASDAQ:AVGO) is positioning itself for a major expansion in custom AI chips as Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google ramps up its next-generation TPU technology and Anthropic plans to deploy 5 gigawatts of the chips in 2027.

Broadcom’s Google TPU Deal Expands

During Broadcom’s fiscal third-quarter earnings call Wednesday, CEO Hock Tan said the company has started production shipments of Google’s next-generation TPU v8i, following high-volume deliveries of its Ironwood TPU v7 to both Google and Anthropic.

The new TPU v8i features more memory and bandwidth than Ironwood and is optimized for AI inference workloads, Tan said.

Broadcom also recently expanded its long-term agreement with Google to develop and supply future generations of TPUs and AI networking products. Under the agreement, Broadcom expects to deliver "multi-tens of billions of dollars" worth of TPUs annually over the next several years.

Tan said Broadcom expects demand in 2028 and 2029 to be met through successive generations of increasingly sophisticated TPUs being developed with Google.

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Anthropic Set For Massive TPU Ramp

Anthropic could become an even bigger growth driver.

Broadcom is deploying 1 gigawatt of Ironwood capacity for Anthropic in 2026 and expects the AI company to deploy another 5 gigawatts of TPU v8i in 2027.

The company sees an additional 10 gigawatts of potential Anthropic deployments in 2028.

"Anthropic is on track to become our largest XPU customer in 2027 and sustain that in 2028," Tan said.

Broadcom’s TPU Ramp Expands Beyond Google

Shay Boloor, chief market strategist at Futurum Equities, took to X and highlighted that Broadcom has begun production shipments of Google’s next-generation TPU v8i, while Anthropic is expected to deploy an additional 5 gigawatts of the chips in 2027.

"That gives Broadcom another large-scale TPU ramp beyond Google as the same architecture expands across multiple AI customers," he wrote.

Broadcom’s AI Revenue Surges

Broadcom’s AI semiconductor revenue jumped 221% year over year to $16.7 billion in the third quarter. The company expects AI semiconductor revenue to accelerate to $21.7 billion in the fourth quarter, up 236% year over year.

Broadcom expects fiscal 2026 AI revenue to reach $58 billion, highlighting the growing contribution from custom accelerators and AI networking.

Broadcom reported third-quarter revenue of $29.59 billion, topping analyst estimates of $29.36 billion. Adjusted earnings came in at $3.32 per share, above expectations of $3.24, according to Benzinga Pro.

For the fourth quarter, Broadcom expects revenue of approximately $34.8 billion, slightly below analysts’ $35.03 billion estimate. The weaker-than-expected outlook appeared to pressure the stock in after-hours trading.

Price Action: Broadcom shares closed at $367.24, down 0.66% on Wednesday and fell another 0.82% to $364.23 in after-hours trading, according to Benzinga Pro.

According to Benzinga Edge Rankings, AVGO ranks in the 95th percentile for Quality, with positive long-term price-trend ratings but negative ratings across the short- and medium-term time frames.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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