Broadcom Inc. was headed for the biggest decline in three weeks following a report that Alphabet Inc.’s Google is considering dropping the company as a supplier of artificial intelligence chips as soon as 2027.
(Bloomberg) — Broadcom Inc. was headed for the biggest decline in three weeks following a report that Alphabet Inc.’s Google is considering dropping the company as a supplier of artificial intelligence chips as soon as 2027.
The Information reported Thursday that Google executives had set a goal earlier this year to move away from Broadcom after a prolonged standoff over the price it pays for chips, citing an unidentified person familiar. Separately, the search-engine giant has worked since last year to shift to Marvell Technology Inc. for chips that connect servers to ethernet switches, the Information said.
Google and Broadcom didn’t immediately respond to requests for comment. Broadcom shares was down 6.5% in premarket trading at $53.57 in New York. Marvell gained 4.3%.
Tech companies including Google and Microsoft Corp. have poured money into developing AI models, helping fuel a boom among semiconductor makers that can produce chips for the technology. Broadcom Chief Executive Officer Hock Tan had told investors in June that he expected AI-related chip sales could account for more than a quarter of the company’s revenue soon.
Google Cloud announced a program to design tensor processing units, tailor-made for a branch of AI called neural network machine learning, in 2016. The Information suggested that Google could fully design the chips in-house if it ended up dropping Broadcom in the future.
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