This article first appeared on GuruFocus.
Broadcom (NASDAQ:AVGO) shares slipped about 2% on Monday following a media report that Alphabet’s Google may be expanding its artificial intelligence chip supplier network to include a new partner.
The decline came as Marvell Technology (NASDAQ:MRVL) surged on the same report, which indicated Google is in discussions with Marvell to jointly develop two custom chips designed to improve the efficiency of AI model processing.
Broadcom has been a longtime silicon provider for Google’s tensor processing unit, or TPU, portfolio. The reported talks with Marvell could signal Google’s intent to diversify its supply chain for in-house AI hardware as it positions its TPU offerings as an alternative to Nvidia’s dominant graphics processors.
Wells Fargo analysts said a potential Marvell win would represent a meaningful positive for the chipmaker and boost confidence in its customer diversification efforts. Marvell’s existing custom chip clients include Amazon and Microsoft. A Broadcom representative did not immediately respond to a request for comment.
