Broadcom CEO Claims Custom OpenAI Chip Beats Nvidia at Half the Cost
AVGO sits 22% above its 52-week low of $289.96.
Summary
Broadcom's Q3 earnings call delivered a bold competitive claim: CEO Hock Tan says the custom 'Jalapeno' chip built for OpenAI outperforms Nvidia's Grace Blackwell Ultra in performance per watt, latency, throughput, and power for inference workloads, at half the cost. This follows the Q3 beat and soft Q4 guidance already reported, but adds a new narrative layer: Tan projected AI semiconductor revenue doubling to $115B in FY2027 and $230B in FY2028, with Anthropic deploying 5GW of compute in 2027 and 10GW in 2028, and OpenAI deploying 1.3GW of Jalapeno next year. Jim Cramer called it an 'explosion of business coming.' The stock initially slumped over 5% after hours on weak guidance but recovered as the market digested the custom AI chip demand surge—Q3 AI revenue hit $16.7B, up 221% YoY. This is a direct challenge to Nvidia's dominance in AI accelerators, and if the performance/cost claims hold, it could reshape the competitive landscape for inference workloads. Watch for customer adoption metrics and any Nvidia response in the coming quarters.
At the time of this announcement, AVGO was trading at $354.39 on NASDAQ in the Technology sector, with a market capitalization of approximately $1.7T. The 52-week trading range was $289.96 to $495.00. This news item was assessed with positive market sentiment and an importance score of 8 out of 10. Source: Benzinga.