Market capitalization once reached 1.15 trillion USD! How did the AI chip giant Broadcom AVGO break into Google, Meta, and AWS?

In the past, everyone may only have known about NVIDIA, AMD, and TSMC, but now another low-profile yet powerful AI chip giant, Broadcom (AVGO), is also making a strong entry. Not only has its performance skyrocketed, but it also managed to surpass a market capitalization of 1 trillion USD by the end of 2024, pushing TSL and TSMC aside to rank ninth on the list of the top ten companies by market capitalization in the world.

Why is Broadcom worth paying attention to?

Hold the core design and supply capability of AI chips

Hardware & software are stable revenue sources, and even with fluctuations in the chip market, they can balance risks with enterprise software.

Tech giants such as Google, Meta, and AWS are key partners.

Business model breakdown, dual approach of software and hardware

Broadcom's business model relies on two major sectors: hardware and software.

Semiconductor business (58%): providing high-end network switch chips, customized AI chips (ASIC), storage controllers, base station chips, etc.

Infrastructure software (42%): Strengthening stickiness by providing enterprise virtualization, network security, IT automation, and other tools through mergers and acquisitions of other service providers.

This allows Broadcom to operate simultaneously in:

cloud computing architecture foundation

AI training chip supply chain

Enterprise Software Services

Surviving in three major fields, it is one of the few companies that can make money from AI hardware all the way to software services.

Acquiring the virtualization software company VMware for 61 billion dollars, entering the software market.

Broadcom's predecessor was originally a company specializing in high-end chips, which is Avago Technologies. In 2016, Avago acquired the original Broadcom and continued to use the name, gradually expanding its product line to:

data center

broadband

wireless network chip

store

Industrial applications

Subsequently, in 2023, Broadcom acquired the cloud computing and hardware virtualization software service provider VMware for $61 billion, officially entering the infrastructure software market. After integrating VMware, what did Broadcom gain?

Gained technical control over the aspect of "how to deploy AI systems to cloud servers".

VMware's technology allows businesses to more easily install, operate, and manage AI models in a cloud environment without the need to rewrite much of the underlying architecture.

Seizing the AI gold rush, from data centers to chip customization

With the rise of generative AI, tech giants are rushing to build AI servers and actively train AI models, leading to a surge in chip demand. In this regard, NVIDIA has seized a large share of the GPU market, while Broadcom has taken a different path, specifically focusing on "customized AI chips" for cloud giants.

Like Google's Tensor Processing Unit (, TPU) is designed by Broadcom, and Meta has also collaborated with them to create internal AI chips.

Let Broadcom's AI semiconductor revenue reach 12.2 billion dollars in 2024, a year-on-year increase of 220%, with the AI business accounting for 41% of the company's semiconductor revenue, becoming another giant in AI chips.

The image is a diagram of the Google TPU provided by Broadcom, in which the main chip is provided by Broadcom. Revenue and market capitalization both reached new highs, with market capitalization briefly soaring to 1.15 trillion dollars.

Broadcom's total revenue reached $51.57 billion in fiscal year 2024, with the majority of the contribution still coming from semiconductors at 58% (, but the software segment also grew rapidly at 42% ).

Even more astonishing is that by the end of 2024, Broadcom's market capitalization will first exceed 1 trillion USD, and then surge to 1.15 trillion USD in 2025, ranking alongside Apple, Microsoft, and NVIDIA, advancing into the list of the top ten companies by global market capitalization.

The chart shows that Broadcom set a record high of $1.15 trillion in market capitalization in January 2025. Looking ahead, AI chip revenue is expected to reach $90 billion.

According to Broadcom CEO Hock Tan during the earnings call in December 2024, it is estimated that by 2027, the market size of the segment in the AI chip market where Broadcom can actually participate, sell products, and make profits will grow to between $60 billion and $90 billion.

This forecast reflects the strong growth in demand for AI chips, driving Broadcom's stock price up 21% on the day, with a market capitalization exceeding $1 trillion. Broadcom's acquisition of VMware is aimed at "sticking with enterprise customers" and strengthening the foundation for AI applications.

Will it be the strongest competitor of TSL ( NVIDIA )?

From a technical perspective, it may not be the case, because:

Broadcom focuses on customized AI ASIC chips, binding with tech giants like Google, Meta, TikTok, and AWS.

NVIDIA focuses on making high-end chips based on GPUs that everyone can use.

Although NVIDIA still dominates the entire AI chip industry in terms of revenue and influence, Broadcom is also gradually establishing itself in the core business of cloud customers. In the future, as major platforms increasingly invest in self-developed AI chips, Broadcom's role will become increasingly critical.

This article's market capitalization once reached $1.15 trillion! How did AI chip giant Broadcom AVGO break into Google, Meta, and AWS? It first appeared in Chain News ABMedia.