Broadcom: The Hidden Winner in Google's Anthropic Chip Deal?Written by Leo Miller. Published 10/30/2025.
Key Points- Google and AI developer Anthropic just announced a large chip and cloud services deal.
- While it is not immediately obvious why, the announcement is good news for Broadcom.
- See why Google and Anthropic's announcement adds potential to AVGO shares.
Broadcom (NASDAQ: AVGO) has collected a string of positive developments in 2025, including multiple impressive earnings reports and a 10-gigawatt (GW) AI chip deal with ChatGPT maker OpenAI. Its latest potential win, however, requires connecting a few dots.
On Oct. 23, OpenAI competitor Anthropic announced a major expansion of its relationship with Alphabet (NASDAQ: GOOGL) subsidiary Google. Anthropic said it will deploy “up to one million” of Google’s Tensor Processing Units (TPUs) and use more of Google Cloud’s services. Overall, the expanded partnership could be “worth tens of billions of dollars,” and Anthropic expects it to bring more than 1 GW of compute capacity online in 2026. Below, we break down why this matters for Broadcom.
Why Google’s Anthropic Announcement Is a Positive Sign for Broadcom
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Anthropic is one of the leading startups building large language models (LLMs) to compete with OpenAI’s ChatGPT; its Claude model is often regarded as one of the more capable LLMs. Google’s TPUs are custom AI accelerators that the company developed with Broadcom, and Google is generally considered Broadcom’s longest-standing and largest custom AI-chip customer.
It’s not fully public how much Google uses TPUs internally versus how much it makes available to external customers. Google can run TPUs to power its own models and improve Search and YouTube, or it can rent TPUs to customers like Anthropic to train and deploy their models. Such rentals would show up in Google Cloud, which generated more than $49 billion in revenue over the last 12 months.
Customers can also rent NVIDIA (NASDAQ: NVDA) GPUs from Google. At the Morgan Stanley Technology Conference in March, Google remarked that “TPUs really power our internal efforts,” suggesting TPUs mainly support its own model development while GPUs have been the default rentals for cloud customers.
Anthropic’s announcement appears to be the first large-scale external TPU deployment Google has publicly confirmed. That signals a shift toward greater external TPU usage and could make similar large-scale TPU deals with other customers more likely.
More external TPU deployments would increase demand for TPUs overall — and more TPUs sold or produced for Google would likely translate into more revenue for Broadcom, Google’s TPU co-developer. While there is no guarantee this external usage will materialize at scale, it represents a meaningful upside catalyst for Broadcom.
Does Anthropic Think AVGO’s Chips Are Superior to MRVL’s?Another wrinkle: Anthropic also uses Amazon.com’s (NASDAQ: AMZN) Trainium chips, Amazon’s answer to Google’s TPUs. Trainium has been historically co-developed with Broadcom competitor Marvell Technology (NASDAQ: MRVL). Anthropic’s expansion of TPU usage raises the question of whether it plans to shift away from Trainium — in other words, whether it finds TPUs superior and is moving closer to Google and farther from Amazon.
If Anthropic increasingly prefers TPUs, that would be another win for Broadcom, suggesting its custom AI chips outcompete Marvell’s and strengthening Broadcom’s position for future deals.
That said, Anthropic made clear Amazon remains a key partner, calling Amazon its “primary training partner and cloud provider.” It also noted ongoing work on Project Rainier — “a massive compute cluster with hundreds of thousands of AI chips across multiple U.S. data centers.” Even so, the “up to one million TPUs” Anthropic could deploy sounds larger than the “hundreds of thousands” described for Rainier, which suggests Anthropic may increasingly prefer TPUs over Trainium.
AVGO’s Potential Rises After Google-Anthropic AnnouncementOverall, the Google–Anthropic announcement is a positive development for Broadcom. If Google begins to deploy TPUs more widely to external customers, that would increase demand for the custom chips Broadcom helps build and add a potential revenue driver for AVGO.
It’s too early to know whether wide external TPU adoption will happen, but the possibility is an encouraging sign for Broadcom’s future prospects. |
