Broadcom partners with Apollo and Blackstone on alternative financing for AI hardware, shifting from transactional chip supplier to vertically scaled silicon partner.

Broadcom (AVGO) is partnering with Apollo, Blackstone, and other investors on alternative financing structures to fund large-scale AI hardware production, moving beyond traditional chip sales cycles.

The AI semiconductor business posted a record $10.8 billion in revenue last quarter. Under a base case, revenue is projected to compound at 22.7% annually over three years, growing from $68.3B to $126.1B.

The new AI XPU platform, valued at $35 billion and being launched by Apollo, represents a structural change that could layer a new revenue stream on top of the current AI chip trajectory. However, consolidated gross margin is guided to decline to approximately 74% next quarter due to lower-margin TPU competition.