Broadcom positioned as better AI chip play than AMD as it pursues custom silicon strategy with major cloud customers.

Broadcom is co-designing custom AI chips (called XPU chips) for individual customers including Anthropic, Alphabet, Meta Platforms, and OpenAI, rather than competing directly with Nvidia on general-purpose chips as AMD does.

Broadcom generated $10.8 billion in AI revenue in the second quarter and has reiterated a long-term expectation of $100 billion in annual AI chip sales starting in fiscal year 2027.

AMD's data center revenue grew 57% year over year to $5.8 billion in the first quarter of 2026, including a plan to supply Meta Platforms with 6 gigawatts of Instinct GPUs, but faces difficulty displacing Nvidia due to existing CUDA software lock-in.