Broadcom’s custom chip and AI-related businesses continue to surge, with the vendor touting a significant chip deal and expansion with Anthropic and a new unnamed customer, and Broadcom sitting on a $73 billion backlog of AI-related orders coming out of its latest fiscal year.

Broadcom CEO Hock Tan told investors during the vendor’s latest earnings call that Anthropic was the previously unnamed customer that had signed a $10 billion custom-chip deal earlier this year. That deal, which had been rumored to have come from OpenAI, was for Anthropic to purchase Google’s latest Ironwood tensor processing unit (TPU), which is being designed and sold by Broadcom.

Anthropic has since placed an additional order valued at $11 billion that Tan said is scheduled for delivery later next year.

Tan did clarify that the Anthropic deal is a “system sale,” similar to what Anthropic is getting from a similar deal with Google.

“It’s a real system sale,” Tan explained. “We have so many components beyond XPUs, custom accelerators in … any AI system used by hyperscalers that, yeah, we believe it begins to make sense to do it as a system sales and be responsible, be fully responsible for the entire system. … This customer … we are selling it as a system with our key components in it, and that's no different than selling a chip we certify and final ability to run as part of the whole selling process.”

Tan also proclaimed that Broadcom has picked up a “fifth XPU customer through a $1 billion order placed for delivery in late 2026,” but would not take the bait on a question as to whether that customer was OpenAI.

“It’s a fifth customer, and it’s a real customer, and that will grow,” Tan divulged. “They are on a multi-year journey to their own XPUs, and let’s leave it at that.”

Tan did add that Broadcom’s recently signed deal with OpenAI to co-develop custom AI hardware was “an agreement, an alignment of where we’re headed,” with that deal beginning to bear fruit beginning in 2027.

AI boom continues

Broadcom’s AI business also continues to boom, with the vendor closing its latest fiscal year with $73 billion in AI-related backlog sales on the books. Tan said this includes “XPUs, switches DSPs, lasers for AI data centers that we anticipate shipping over the next 18 months.”

“And, obviously, this is as of now. I mean, we fully expect more bookings to come in over that period of time, and so don't take that [$73 billion] as that's the revenue that we ship over the next 18 months,” Tan added. “We have that now and in the bookings has been accelerating and, frankly, we see that bookings, not just in XPUs, but in switches, DSPs, all the other components that go into AI data center, we have never seen bookings of the nature that what we have seen over the past three months.”

Tan added this includes continued robust interest in its recently launched Tomahawk 6 switch platform.

“This is one of the fastest growing products in terms of deployment that we ever seen, of any switch product that we put out there,” Tan said. “It is pretty interesting, and partly because it is the only one of its kind out there at this point, at 102-terabytes per second, and that's the kind, the exact product needed to expand the clusters of the latest GPU and XPUs out there.”

VMware remains a ‘driver’

While chips and AI drove the conversation, Tan did note that Broadcom’s VMware division continues to be a business driver.

Tan specifically pointed to VMware in helping Broadcom’s broader 24% year-over-year increase in full-year revenues, which hit a company record $64 billion. More specific to Broadcom’s infrastructure software business, which is where VMware sits, segment revenues increased 26% in fiscal 2025 to $27 billion for the full year.

That growth is expected to slow a bit for fiscal 2026, with Tan stating segment growth will be “at low double-digits.”

Tan during Broadcom’s last earnings call noted that more than 90% of VMware’s 10,000 largest customers have signed up for the vendor’s halo Cloud Foundation (VCF) platform and accompanying subscription licensing plan, which was a subtle increase from the 87% number touted at mid-year.

However, Tan at that time did clarify that conversion rate was only in terms of license sold and not actual VCF deployments.

“I'm careful about [my] choice of words,” Tan added. “Because we have sold them on it, and they bought licenses to deploy, doesn't mean they are fully deployed.”

Tan explained that this deployment will be “the hard work over the next two years that we see happening,” but that’s the part where customers will be able to garner value from those deployments. It will also allow Broadcom to then sell more advanced services into those deployments.

“First phase is convincing people to convert from perpetual subscriptions [to] purchasing VCF,” Tan said. “Second phase is make that purchase they made on VCF create the value they look for in private cloud, on their premise, on their IT data center. That's what's happening and that will sustain for quite a while, because on top of that, we will start selling advanced services, security, disaster recovery, even AI running AI workloads. All that is very exciting.”