[News] Anthropic Emerges as Broadcom’s Mega-Client; Margin Challenges Ahead

As a key beneficiary of Google’s TPU boom, U.S. chipmaker Broadcom’s ASIC business is drawing heightened attention. On its latest earnings call, despite Broadcom usually keeps its major clients under wraps, CEO Hock Tan revealed that the company’s $10 billion custom-chip megadeal came from AI lab Anthropic, according to CNBC.

Barron’s, citing Tan, adds that a fifth AI-chip customer has joined Broadcom’s roster, placing a $1 billion order slated for delivery in late 2026.

CNBC reports that in its September earnings call, Broadcom disclosed a $10 billion custom-chip order from an unnamed client—sparking widespread speculation that the buyer might be OpenAI. However, the report notes that Tan now clarified that it was actually AI lab Anthropic, which ordered the latest TPU Ironwood racks and added another $11 billion order in Broadcom’s most recent quarter.

CNBC explains that Broadcom produces custom ASIC chips, while it helps Google manufactures the search engine giant’s TPUs, and last month Google highlighted that it trained its advanced Gemini 3 model entirely on these TPUs.

Margin Risks Mount Amid AI Revenue Shift

However, Reuters reports that while Broadcom holds a $73 billion backlog set to ship over the next 18 months, CFO Kirsten Spears cautioned that margins could slide. She noted that Q1 consolidated gross margin is expected to drop about 100 basis points sequentially, mainly due to a larger share of AI revenue.

Analysts cited by Reuters highlight two key risks: the company’s heavy concentration among just five AI customers, and the lower margins on AI systems—which are expected to comprise a larger share of total revenue in coming quarters, particularly in the second half of fiscal 2026.

According to CNBC, Broadcom topped fourth-quarter estimates with adjusted EPS of $1.95 (beating $1.86 expected) and revenue of $18.02 billion (above $17.49 billion consensus), fueled by AI demand. The company projected Q1 revenue at approximately $19.1 billion—28% above last year and exceeding the $18.3 billion analyst forecast. The report, citing CEO Hock Tan, adds that the company’s AI chip sales are expected to double year-over-year to $8.2 billion this quarter across custom chips and networking semiconductors.

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(Photo credit: Broadcom)