Broadcom Inc. (NASDAQ:AVGO) saw its share price climb 2.6% in after-hours trading on Monday after filing details of substantial long-term arrangements with Google (NASDAQ:GOOGL). The filing outlines a coordinated effort to co-develop custom silicon and to secure an extended supply of networking and related components over the coming years.
According to the filing, the companies have executed a "Long Term Agreement for Broadcom to develop and supply custom Tensor Processing Units ("TPUs") for Google’s future generations of TPUs." That language confirms Broadcom will remain the primary design partner for the specialized chips Google uses to support its most advanced AI models.
In addition to chip design and production, the agreement includes a separate "Supply Assurance Agreement for Broadcom to supply networking and other components to be used in Google’s next-generation AI racks through up to 2031." Those networking components are described in the filing as critical pieces for interconnecting the very large clusters of chips necessary to train and run neural networks such as Google’s Gemini.
The filing further describes an expansion of the arrangement into a tri-party structure that brings Anthropic PBC into the picture. Under the terms noted in the filing, "Anthropic, beginning in 2027, will access through Broadcom approximately 3.5 gigawatts" of next-generation TPU-based compute capacity. This allocation appears intended to provide third-party AI developers with direct access to TPU-backed compute resources made available via Broadcom’s arrangements with Google.
These commitments highlight the magnitude of capital being directed to AI infrastructure as companies scale compute and interconnect capacity. Market observers might view the extension of supply assurances through 2031 as an indicator of more predictable, high-margin revenue for Broadcom’s custom ASIC business, given the long-dated nature of the contracts outlined in the filing.
Broadcom’s role as a primary design partner and guaranteed supplier under these agreements reinforces its strategic position within the AI supply chain. By securing long-term commitments from hyperscale cloud customers, the company is positioned to capture an extended revenue stream tied to both custom TPUs and the networking elements required to deploy them at scale.
While the filing centers on contractual commitments and planned access to capacity beginning in 2027 for Anthropic, it does not provide additional operational or financial detail about the phasing of deliveries, pricing, or how utilization of the committed capacity will evolve over time. The filing also does not quantify the revenue or margin impact for Broadcom beyond indicating the duration of the supply assurances.
Contextual note: The filing’s disclosures on long-term device design partnership, supply assurance through 2031, and tri-party capacity access to Anthropic are the primary facts disclosed and form the basis for market reaction noted at the outset.