Key Takeaways
- • Broadcom CEO Hock Tan told CNBC on Monday that the company stands by its long-term AI revenue targets despite investor concern over a possible slowdown in frontier AI model development.
- • Broadcom shares fell 4.8% and the iShares Semiconductor ETF dropped 5.6% on the day, after Anthropic CEO Dario Amodei's weekend essay called for moderating the pace of model development.
- • Tan reiterated forecasts from Broadcom's Sept. 2 fiscal Q3 2026 earnings call of $115 billion in AI semiconductor revenue in fiscal 2027 and $230 billion in fiscal 2028.
- • Tan said Anthropic is on track to become Broadcom's largest custom chip customer in 2027 and remain so in 2028.
- • Tan described some AI investors as behaving like casino gamblers, a characterization that drew attention given AI's weight in retirement portfolios.
Summary
Broadcom CEO Hock Tan said on Monday that he sees little reason to change the company's longer-term AI outlook, according to CNBC. Speaking on CNBC's "Mad Money" with Jim Cramer, Tan said demand for compute infrastructure, AI frontier model development and inference "as continuing to be very strong and, I believe, very durable." He was responding to investor unease after Anthropic CEO Dario Amodei published a weekend essay advocating a moderation in the pace of model development. The essay received support from OpenAI CEO Sam Altman and Elon Musk.
The market reaction was sharp. Broadcom shares fell 4.8%, while the iShares Semiconductor ETF fell 5.6%, and companies selling other data-center components also declined. Broadcom's custom-chip business counts Anthropic among its most important customers, which explains the stock's sensitivity to Amodei's comments.
On Broadcom's fiscal 2026 third-quarter earnings call on Sept. 2, Tan forecast AI semiconductor revenue of $115 billion in fiscal 2027, doubling to $230 billion in fiscal 2028. Broadcom's AI revenue includes custom AI accelerators and networking chips. Tan said Anthropic is on track to become the company's largest custom chip customer in 2027 and maintain that position in 2028, a shift from Google, which has historically been considered Broadcom's largest custom customer through its co-design of tensor processing units.
Tan said he agrees with Amodei that some restrictions on AI are warranted, but he was less alarmed about the technology's direction, stressing the need for governance and safeguards. He was particularly optimistic about inference demand. Separately, coverage of Tan's remarks reported that he characterized many AI investors as behaving like casino gamblers, and that he said capital would be the biggest constraint facing the company as AI development continues.
The market reaction was sharp. Broadcom shares fell 4.8%, while the iShares Semiconductor ETF fell 5.6%, and companies selling other data-center components also declined. Broadcom's custom-chip business counts Anthropic among its most important customers, which explains the stock's sensitivity to Amodei's comments.
On Broadcom's fiscal 2026 third-quarter earnings call on Sept. 2, Tan forecast AI semiconductor revenue of $115 billion in fiscal 2027, doubling to $230 billion in fiscal 2028. Broadcom's AI revenue includes custom AI accelerators and networking chips. Tan said Anthropic is on track to become the company's largest custom chip customer in 2027 and maintain that position in 2028, a shift from Google, which has historically been considered Broadcom's largest custom customer through its co-design of tensor processing units.
Tan said he agrees with Amodei that some restrictions on AI are warranted, but he was less alarmed about the technology's direction, stressing the need for governance and safeguards. He was particularly optimistic about inference demand. Separately, coverage of Tan's remarks reported that he characterized many AI investors as behaving like casino gamblers, and that he said capital would be the biggest constraint facing the company as AI development continues.
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