Broadcom Outshines Marvell in the Custom AI Chip Race

Custom AI chips are gaining popularity among AI hyperscalers due to their ability to offer superior cost performance compared to traditional GPU-based training. Broadcom and Marvell Technology, two companies producing networking equipment for data centers, have launched custom AI chip businesses with a few critical customers.

Broadcom has a larger client list, including Alphabet, Meta Platforms, OpenAI, and Anthropic, while Marvell has captured Amazon and Microsoft. Custom AI chips are expected to grow in popularity beyond 2027 as they prove to be more cost-effective than GPUs.

Comparing the two companies using next year's earnings projections, Broadcom is trading at about half the price of Marvell and is expected to grow faster, with an average Wall Street analyst estimating 64% revenue growth for Broadcom in fiscal year 2027 compared to 45% for Marvell.