Alphabet and Broadcom, co-developers of custom AI chips called TPUs, are positioned as long-term winners in the AI infrastructure boom.

Alphabet's cloud computing revenue surged 63% to $20 billion last quarter, while operating income tripled to $6 billion. At the end of Q1 2026, the company had a $460 billion Google Cloud backlog.

Broadcom manufactures TPUs (custom AI application-specific integrated circuits, or ASICs) and records the revenue from their sales. Anthropic placed a $21 billion TPU order with Broadcom to be delivered this year. Broadcom expects to generate more than $100 billion in ASIC revenue in fiscal 2027.

Alphabet's TPUs give it cost advantages: the company can train AI models and run inference at lower cost than competitors relying on Nvidia's GPUs. Alphabet's chips are now on their eighth generation and are being offered to select customers for use within and outside Google Cloud.