As AI models transition from pre-training to logical reasoning, specialized chips like ASICs are poised to replace GPUs. Broadcom's CEO predicts the ASIC market could reach $60-$90 billion by 2027, potentially doubling Broadcom's AI business annually over the next three years. This optimistic forecast led to a significant stock surge for Broadcom (AVGO, Financial), with shares rising 27%, while Nvidia saw a 3.3% drop. The shift from GPU to ASIC is driven by the need for more efficient, cost-effective AI processing. Major tech companies are increasingly developing custom ASIC chips, with Broadcom and Marvell as key suppliers. As AI evolves, the demand for ASICs is expected to grow substantially.
Broadcom's (AVGO) ASIC Chip Demand Spurs Stock Surge Amid AI Shift
Dec 16, 2024
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I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.
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