Broadcom CEO on AI chips, capex, and competition (with Interviewer (Bloomberg Tech Summit))

Asks about Google taking chip design in-house (customer-owned tooling) and whether that concerns Broadcom.

Interviewer

Hock Tan

Customer-owned tooling is expected in tech. Broadcom competes by out-engineering rivals. The real competitor is Nvidia's GPU, which forces Google to create equivalent technology.

Broadcom has been in semiconductors for over 20 years and continuously invests to stay ahead.

Asks about the Anthropic partnership structure and concerns about end-user demand materializing.

Interviewer

Hock Tan

The Anthropic bet was a leap of faith on generative AI and enterprise adoption. It has paid off. Broadcom also bet that generative AI would take off substantially among enterprises.

Tools from Anthropic, OpenAI, and Google are phenomenal for productivity. Broadcom uses them internally for engineering design and code assistance.

Asks about the OpenAI chip partnership and reports of snags regarding Microsoft commitments.

Interviewer

Hock Tan

The OpenAI partnership is on track for production late this year. There are no snags. Each of Broadcom's six AI chip customers is at a different stage of their journey to create custom silicon.

Google is way ahead. OpenAI is one of the engaged partners, and the AI accelerator silicon is working very well in labs and data centers.

Asks about M&A strategy given the AI revolution and whether Broadcom is entering a post-M&A phase.

Interviewer

Hock Tan

M&A is a distraction. Broadcom is doubling revenue organically to over $50 billion. The insatiable demand for AI compute makes it hard to choose M&A over focusing on generative AI.

All M&A involves acquisition, regulatory hurdles, and integration. The organic opportunity in AI is too compelling.

Asks about token price sensitivity and competition from Chinese LLMs like DeepSeek and Alibaba's Qwen.

Interviewer

Hock Tan

Enterprise AI usage is still in early innings. The focus should be on return on investment, not throttling tokens. Chinese LLMs gaining traction is heard but not a major concern for Broadcom.

If a tool creates value and ROI, there's no reason to stop using it. It's not like feeding tokens into an arcade game.

Asks about competition in networking from companies like Cisco.

Interviewer

Hock Tan

Broadcom's networking business is taking off like a rocket. Demand for AI networking is massive. Broadcom prioritizes strategic customers and is happy for overflow to go to competitors like Cisco.

Broadcom has 17 semiconductor divisions, 5-6 of which are critical for AI chips and clusters.

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