The launch of ChatGPT has sparked a race for artificial intelligence between tech giants. And this race has boosted demand for specialized artificial intelligence chips, needed to train and deploy AI models. As a result, Nvidia, the world leader in this field, saw its order book swell and the value of its stock explode. Since the start of the year, Nvidia’s stock has increased by 167% and, today, this company, best known for its graphics cards for video games, is worth more than $3,000 billion.
But another company you may never have heard of is fast becoming a tech giant, thanks to the race for artificial intelligence. This is the chip manufacturer Broadcom, an American company founded in 1961 and based in California. Broadcom has a very diversified business, since it offers solutions for data centers, network solutions, cybersecurity software, and even connectivity chips for smartphones. However, if Broadcom’s stock has exploded recently, it is thanks to chips for artificial intelligence.
A trillion dollar company
As CNBC reports, Broadcom recently indicated that it is developing AI chips with three large customers. And each of these customers could deploy, by 2027, 1 million AI chips in networked clusters. Hock Tan, the head of Broadcom, also indicated that the artificial intelligence market could generate between $60 billion and $90 billion over the next three years. In addition to developing chips with its customers, Broadcom also provides connectivity solutions that can be used to link them together.
The company does not indicate who its customers are. But according to rumors, in addition to existing customers, Broadcom could generate additional revenue through partnerships with Apple and OpenAI. “We believe that the opportunities that will present themselves to us over the next three years in the field of AI are considerable“, indicated the CEO of Broadcom.
In any case, the value of Broadcom shares soared following this announcement. Since the start of the year, it has gained more than 100%. And now Broadcom has a market cap of over $1 trillion. According to the website companiesmarketcap.com, Broadcom is today the ninth most valuable company in the world, behind Apple, Microsoft, Nvidia, Amazon, Alphabet, Saudi Aramco, Meta and Tesla. This also exceeds the capitalizations of the Taiwanese chip manufacturer TSMC and Berkshire Hathaway.
- The race for artificial intelligence, sparked by the launch of ChatGPT, has propelled Nvidia among the largest companies in the world
- Broadcom, which also makes AI chips, is experiencing a similar trajectory
- Recently, it indicated that it could generate several tens of billions of dollars, thanks to orders from tech giants