Broadcom: The Hidden Winner in Google's Anthropic Chip Deal?
Broadcom (NASDAQ: AVGO) has raked in a lot of positive news in 2025. This includes posting multiple impressive earnings reports and its 10-gigawatt (GW) artificial intelligence (AI) chip deal with ChatGPT maker OpenAI. However, the chip giant’s latest win requires connecting several dots.
On Oct. 23, OpenAI competitor Anthropic announced a big expansion of its relationship with Alphabet (NASDAQ: GOOGL) subsidiary Google. Anthropic says it will deploy “up to one million” of Google’s Tensor Processing Units (TPUs) and use more of its cloud services. Overall, the expanded partnership will be “worth tens of billions of dollars."
They expect it to bring more than 1 GW of computing capacity online in 2026. Below, we’ll break down why this deal has positive implications for Broadcom.
Why Google’s Anthropic Announcement Is a Positive Sign for Broadcom
Anthropic is one of the leading startup companies developing large language models (LLMs) that compete with OpenAI’s ChatGPT. Its Claude model is often regarded as one of the most intelligent in the AI ecosystem. Google’s TPUs are custom AI chips that the firm has developed with none other than Broadcom. Google is generally considered Broadcom’s longest-standing and largest custom AI chip buyer.
To what extent Google deploys these TPUs internally versus providing them to outside customers is unknown. It can use them for its models, driving AI improvements in its Search and YouTube businesses. Or, it can rent TPUs to customers like Anthropic, which they can use to develop and deploy their own models. This would show up in its Google Cloud segment, which has generated over $49 billion in revenue in the last 12 months.
However, for this same purpose, customers can also rent NVIDIA (NASDAQ: NVDA) graphics processing units (GPUs) from Google. At the Morgan Stanley Technology Conference in March, Google said, “TPUs really power our internal efforts." This suggests that the company mainly uses TPUs to develop its models while renting out GPUs to cloud customers.
The announcement with Anthropic appears to be the first large-scale external TPU deployment that Google has publicly confirmed. This indicates that Google will see more external usage of its TPUs going forward. This can come from Anthropic, allowing Google to announce large-scale TPU deals with other customers.
This would create a greater need for TPUs at Google as it looks to support internal and external AI efforts. Long story short, more TPUs would mean more revenue to Google’s TPU co-developer, Broadcom.
There is certainly no guarantee that Google's external TPU usage will materialize. However, this possibility creates a potential upside catalyst for Broadcom that could be significant.
Does Anthropic Think AVGO’s Chips Are Superior to MRVL’s?
There is another interesting wrinkle to this story. Anthropic also uses Amazon.com’s (NASDAQ: AMZN) Trainium chips. These chips are Amazon’s answer to Google’s TPUs. They have been historically co-developed with Broadcom competitor Marvell Technology (NASDAQ: MRVL). The expansion of Anthropic’s TPU usage raises questions about whether it wants to move away from Amazon’s Trainium chips. Does Anthropic believe TPUs are superior to Trainium, leading it to move closer to Google and further from Amazon?
If so, this would be another win for Broadcom. It would indicate that its custom AI chips are better than Marvell’s, strengthening Broadcom's position as it looks to win future deals.
However, Anthropic made it clear that Amazon will remain a key partner. It called Amazon its “primary training partner and cloud provider." It also noted that the two continue to work on Project Rainier. Rainier is “a massive compute cluster with hundreds of thousands of AI chips across multiple U.S. data centers.” Still, the “up to one million TPUs” it could deploy sounds like more than the “hundreds of thousands of AI chips” related to Project Rainier.
This provides evidence that Anthropic may increasingly prefer TPUs over Trainium.
AVGO’s Potential Rises After Google-Anthropic Announcement
Overall, the Google-Anthropic announcement is a positive development for Broadcom. It increases potential for the stock, as external TPU deployments at Google could become more common in the future.
While it's too early to confirm whether this will actually happen, the added potential is still a positive sign.
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