Broadcom expands AI chip partnership with Meta through 2029, secures over 1GW capacity
Broadcom expanded its AI chip partnership with Meta through 2029, lifting shares 3% after unveiling plans to design multiple custom processors and Ethernet networking technology. The deal features an initial commitment of over one gigawatt of computing capacity and shifts CEO Hock Tan into an advisory role on Meta’s board.
1. Expanded AI Partnership
Broadcom and Meta have extended their collaboration through 2029 to co-develop several generations of custom AI processors under the MTIA program, as well as integrate Broadcom’s Ethernet networking technology to connect Meta’s AI clusters.
2. Computing Capacity Commitment
The initial phase of the agreement covers more than one gigawatt of computing capacity—equivalent to a sustained, multi-gigawatt rollout—laying the groundwork for future expansions across training and inference workloads.
3. Executive Role Changes
As part of the expanded arrangement, Broadcom CEO Hock Tan will step down from Meta’s board and transition into an advisory role focused on the company’s custom silicon roadmap and AI infrastructure strategy.
4. Financial and Outlook Implications
Extending the partnership to 2029 enhances demand visibility for Broadcom’s AI business and could drive upside to its fiscal 2027 AI revenue target, where each $10 billion of incremental sales translates to approximately $1 per share in earnings.