Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St’s investing ideas for FREE.

  • Broadcom (NasdaqGS:AVGO) has agreed to supply OpenAI with custom AI accelerator ASICs equivalent to 10 gigawatts of compute capacity over four years.

  • The company is expanding its role as a custom AI chip provider to major hyperscalers under a multi year, high volume ASIC supply agreement.

  • This deepens Broadcom’s position in global AI infrastructure as demand for purpose built AI compute continues to build.

Broadcom, best known for its networking, wireless and infrastructure semiconductors, is now firmly positioning itself as an AI chip partner for large cloud and internet platforms. The OpenAI agreement adds to its custom ASIC work with hyperscalers and sits alongside its existing data center, networking and software businesses.

For you as an investor, the key angle is Broadcom’s increasing exposure to AI compute and data center build outs, alongside its established infrastructure franchise. The OpenAI deal signals that hyperscalers are using Broadcom for tailored silicon at scale, which may inform how you evaluate the mix of its revenue sources and capital allocation priorities.

Stay updated on the most important news stories for Broadcom by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on Broadcom.

NasdaqGS:AVGO Earnings & Revenue Growth as at Jan 2026 NasdaqGS:AVGO Earnings & Revenue Growth as at Jan 2026

How Broadcom stacks up against its biggest competitors

For Broadcom, the OpenAI ASIC supply deal reinforces a shift from a diversified chip vendor into a core AI compute partner for hyperscalers alongside Nvidia and Advanced Micro Devices. Supplying custom accelerators at this scale ties Broadcom more closely to long-term data center capex cycles and could make AI semiconductor and networking revenue an even larger share of the overall business mix.

The news lines up with existing investor narratives that focus on custom AI silicon and rack-scale systems as key drivers of Broadcom’s future risk and reward. The OpenAI partnership adds another large AI customer to the story that already includes major cloud providers, while also increasing the importance of execution in VMware-based infrastructure software as a second leg supporting earnings alongside AI hardware.

  • The long-duration ASIC agreement with OpenAI supports visibility for AI-focused revenue and underpins Broadcom’s role in hyperscale data center build outs.

  • Broadcom’s position as a custom-chip partner for several large platforms may help it compete on cost and performance versus more general-purpose GPUs from other suppliers.

  • The AI business is concentrated in a small number of big customers, so changes in their spending plans or in-house chip efforts could affect Broadcom’s revenue and margins.

  • Regulatory, export control and geopolitical risks around advanced AI chips remain an overhang for large-cap US semiconductor names, including Broadcom.

From here, you may want to watch how quickly OpenAI ramps deployments, how Broadcom talks about AI order backlog and customer concentration in upcoming results, and whether new hyperscaler wins or design losses are mentioned. If you want to see how different investors are connecting this deal to long-term growth, risks, and valuation for Broadcom, check out the latest community narratives on its company page.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include AVGO.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com