Broadcom Inks Deal With Google For Custom TPUs, AI Infra; Anthropic Compute Access Expanded

• The deal with Google also included a supply assurance agreement for Broadcom to provide networking and other components to be used in the latter's next-generation AI racks up to 2031.
• Separately, Broadcom, Google, and Anthropic have also expanded their current strategic collaboration, the filing said. 
• The expanded collaboration will involve Anthropic accessing approximately 3.5 gigawatts through Broadcom from 2027.

Broadcom Inc. (AVGO) and Alphabet Inc.’s (GOOG, GOOGL) Google have entered into a long-term partnership for the Palo Alto-headquartered company to develop and supply custom Tensor Processing Units (TPUs) for the search engine company.

In a filing with the U.S. Securities and Exchange Commission, the companies said that Broadcom’s TPUs would power future generations of Google’s TPUs.

Separately, Broadcom, Google, and Anthropic PBC have also expanded their current strategic collaboration, the filing said.

AVGO stock gained nearly 3% after-hours following the announcement, while GOOG stock climbed about 0.19%.

Deal Contours

The deal with Google also includes a supply assurance agreement for Broadcom to provide networking and other components to be used in the latter's next-generation AI racks through 2031, the company said.

Meanwhile, Broadcom, Google, and Anthropic’s expanded collaboration will involve Anthropic accessing about 3.5 gigawatts (GWs) via Broadcom from 2027. This is part of the multiple GWs of next-generation TPU-based AI compute capacity committed by Anthropic. The additional TPU capacity will support rapidly scaling needs for Anthropic's models, the company said.

“This groundbreaking partnership with Google and Broadcom is a continuation of our disciplined approach to scaling infrastructure: we are building the capacity necessary to serve the exponential growth we have seen in our customer base while also enabling Claude to define the frontier of AI development,” said Krishna Rao, CFO of Anthropic.

“We are making our most significant compute commitment to date to keep pace with our unprecedented growth,” Rao added.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around AVGO stock stayed in the ‘bearish’ territory at the time of writing, while sentiment around GOOG shares was in the ‘bullish’ territory.

One user noted that Broadcom would now be a central partner for Google, Anthropic, and other tech giants, with many large single LLMs running on Broadcom's infrastructure. The user said that while a 2% move is “good,” a fundamental reaction would come shortly.

Another user said that AVGO shares should have rallied higher on the news.

AVGO stock has risen nearly 104% in the past year. Meanwhile, GOOG shares have rallied 99% in the same time.

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