Broadcom and Meta Expand Strategic AI Chip Partnership Through 2029

Broadcom (AVGO) and Meta Platforms (META) have announced a sweeping expansion of their strategic partnership, focusing on the development of custom artificial intelligence processors through 2029. The collaboration aims to advance Meta's goal of achieving AI 'superintelligence' by building a massive computing foundation. The deal centers on the Meta Training and Inference Accelerator (MTIA) chips, which will serve as the backbone of Meta's AI compute infrastructure and data centers. Broadcom will utilize its expertise in Application-Specific Integrated Circuits (ASICs), referred to as XPUs, alongside providing critical networking hardware including Ethernet switches and optical components to reduce network latency. Meta has initially committed to deploying more than one gigawatt of computing capacity using these custom chips. This infrastructure push is supported by Meta's aggressive capital expenditure projections, with the company planning to spend between $115 billion and $135 billion in 2026 to enhance its AI capabilities. This agreement marks the third major win for Broadcom in recent weeks, following similar deals with Google and Anthropic. The company is pivoting toward efficiency-driven AI hardware, with management indicating a long-term target of exceeding $100 billion in AI chip sales by 2027, compared to $8.4 billion in AI-related sales last quarter. As a result of the partnership's scale, Broadcom CEO Hock Tan will step down from Meta's board of directors. However, Tan will continue to serve as an advisor to the company, providing guidance on Meta's custom silicon roadmap and future infrastructure investments.