Broadcom Just Locked In $200 Billion in AI Compute Deals — And It's Still the Cheapest Way to Play the Boom

Everyone is watching NVIDIA. But the quietest money in AI might just be sitting in a San Jose chip designer most people have never heard of.

Broadcom just locked in what may be the largest compute commitment in tech history. Anthropic — the $380 billion AI lab behind Claude — signed an agreement to spend over $200 billion on Google Cloud infrastructure powered by Broadcom-designed custom chips (ASICs). The commitment spans multiple gigawatts of next-generation TPU capacity, with the first wave coming online in 2027.

The deal is a massive validation of Broadcom's custom AI chip strategy. While NVIDIA sells the same GPU to everyone, Broadcom builds bespoke processors for the world's largest hyperscalers — Google (TPUs), Meta, and potentially others. It is the #2 AI chip company by market capitalization at $1.96 trillion, yet trades at just 22.7x forward earnings. That is cheaper than almost any other pure AI play.

Here is what you need to know.

The Deal: $200 Billion for Multiple Gigawatts

Anthropic announced the expanded agreement on April 6, 2026, calling it their "most significant compute commitment to date." The deal with Google and Broadcom locks in multiple gigawatts of next-generation TPU capacity — a massive expansion from the 1+ gigawatt agreement the companies signed in October 2025.

According to a Broadcom SEC filing, the deal includes 3.5 gigawatts of compute capacity. To put that in perspective: a single gigawatt can power roughly 750,000 homes. This is data-center-scale infrastructure for training and running the world's most advanced AI models.

"This groundbreaking partnership with Google and Broadcom is a continuation of our disciplined approach to scaling infrastructure," said Krishna Rao, CFO of Anthropic, in the announcement. "We are making our most significant compute commitment to date to keep pace with our unprecedented growth."

The vast majority of the new compute will be sited in the United States, extending Anthropic's $50 billion commitment to American AI infrastructure.

Anthropic's Explosive Growth

Anthropic's revenue trajectory explains why it needs this much compute. The company's run-rate revenue has surged past $30 billion, up from approximately $9 billion at the end of 2025. More than 1,000 business customers are each spending over $1 million annually — doubling in less than two months.

The company recently closed a $30 billion Series G funding round at a $380 billion valuation, signaling that investors see Claude as a durable competitor in the frontier AI race.

Why Broadcom's Model Might Be More Durable Than NVIDIA's

The contrarian case for Broadcom is simple: hyperscalers want custom silicon. Google designs its TPU architecture but relies on Broadcom to manufacture and supply the chips at scale. Once a hyperscaler builds its infrastructure around a custom ASIC, switching costs are enormous.

NVIDIA's GPUs are general-purpose AI accelerators. Broadcom's ASICs are purpose-built for specific workloads at specific hyperscalers. The ASIC model may offer better margins, deeper moats, and more predictable revenue over multi-year cycles.

Broadcom's AI revenue is already exploding. The company expects AI chip sales to top $100 billion in 2027, driven entirely by hyperscaler demand for custom silicon.

The Valuation Story

Here is where it gets interesting for investors. AVGO trades at $414.14 with a market cap of $1.96 trillion. The forward P/E is just 22.7x — roughly half the multiple of NVIDIA at its peak.

• 52-Week Range: $231.13 – $442.36
• Revenue (TTM): $68.28 billion
• Analyst Consensus: 1.30 (Strong Buy)
• Price Target Mean: $480.49 (16% upside)
• Analysts Covering: 44

Broadcom is not just an AI bet — it is a diversified semiconductor and infrastructure software powerhouse. Its VMware acquisition, networking chips, and broadband businesses provide a revenue floor that pure-play AI names lack. When investors worry about AI over-capitalization, Broadcom's diversified base offers protection. When AI demand surges, Broadcom's custom chip business provides leveraged upside.

The Google-Anthropic deal is proof that the hyperscaler custom-chip model is accelerating. If Broadcom is executing at this level at 22x earnings, the question is not whether to buy — it is whether you are willing to miss out on the stealth AI giant.