Broadcom Slumps on Google's Rival AI-Chip Partnership

Broadcom's shares fell more than 2% in premarket trading after Google announced a new partnership with Marvell, a rival AI-chip supplier.

The news sent Broadcom's shares plummeting as investors worry that the tech giant's exploding AI budget will be split among multiple suppliers, giving Google more negotiating power and flexibility.

Broadcom has a long-term agreement with Google to develop and supply custom AI chips through 2031, but Marvell's win is seen as a threat to Broadcom's dominance in the market.

The danger for Broadcom is not that its revenue from Google suddenly disappears, but that the pie gets split more ways, making it harder for the company to maintain its share of the growing AI-chip market.