Meta Platforms (META.US) has announced an expansion of its multi-billion dollar partnership with Broadcom (AVGO.US) to co-design and manufacture custom chips, bolstering the social media giant's artificial intelligence infrastructure. Under the agreement, the two companies will jointly develop multiple generations of the Meta Training and Inference Accelerator (MTIA), with the collaborative framework set to continue until 2029.
Concurrently, it was disclosed that Broadcom CEO Hock Tan will step down from Meta's board following the expiration of his term at the company's upcoming annual shareholder meeting. In a joint statement released on Tuesday, the companies revealed the collaboration includes a commitment to develop chips capable of delivering over 1 gigawatt of computing power. According to a person familiar with the matter, this agreement is expected to be the initial phase of a sustained, multi-billion dollar deployment plan, with ambitions to scale the deployment to multiple gigawatts in the future with Broadcom's technical support. For context, 1 gigawatt of power is sufficient to supply approximately 750,000 U.S. households simultaneously.
This major business development coincides with a significant adjustment to Meta's board composition. Hock Tan, who joined the Meta board in early 2024 to assist with strengthening hardware infrastructure and supply chain strategy, announced he will not seek re-election. As commercial dealings between the two companies in the custom chip arena have grown substantially, Tan opted to leave the decision-making body to avoid potential conflicts of interest and ensure governance transparency. He will transition to a role as a strategic advisor on Meta's custom chip roadmap, continuing to provide deep technical guidance.
Furthermore, former Estée Lauder executive Tracey Travis will also step down after six years of service on the Meta board. Meta's board has undergone notable changes in recent years. Last year, the company appointed five new directors in a short period, one of whom—former Trump adviser Dina Powell McCormick—has since departed to work full-time on Meta's AI infrastructure projects.
Broadcom has already been collaborating with Meta on custom chip development, an effort that has become increasingly critical as Meta invests tens of billions of dollars in infrastructure to compete in the AI race. Meta is developing its own chips to help reduce costs and lessen its dependence on third-party suppliers like NVIDIA (NVDA.US) and AMD (AMD.US), to whom it has committed billions of dollars for AI processors and other hardware.
Technologically, the partnership is advancing toward the industry's cutting edge. The companies plan to collaborate on developing the industry's first AI compute accelerator based on an advanced 2-nanometer (2nm) process node, aiming to significantly enhance data center energy efficiency and processing performance. Meta has outlined a roadmap for four new chip versions—MTIA 300, 400, 450, and 500—designed to optimize the social platform's recommendation algorithms, content ranking, and large-scale inference tasks through proprietary hardware.
Mark Zuckerberg stated in the announcement, "Meta is collaborating with Broadcom on chip design, packaging, and networking to build the massive compute infrastructure we need to deliver personal super-intelligence to billions of people. As we deploy over 1 gigawatt of custom silicon initially and scale to multiple gigawatts over time, this partnership will bring higher performance and efficiency to all the products we are building."
For Broadcom, this deal represents the latest expansion of its custom AI chip business, which is boosting revenue and investor enthusiasm while positioning the company as a viable alternative to NVIDIA. Earlier this month, Broadcom disclosed a long-term agreement with existing customer Alphabet's Google (GOOGL.US) to collaborate on Tensor Processing Unit (TPU) chips and supply them to AI startup Anthropic PBC. Parts of that agreement, which runs through 2031, had been previously discussed.
Hock Tan commented that the initial phase of the Meta agreement is "just the beginning of a multi-year, multi-generational roadmap to serve a trajectory of massive scale growth in the coming years." News of the expanded partnership boosted Broadcom's stock price by approximately 3.42% in after-hours trading. The stock closed Tuesday at $380.78 and has gained 10% year-to-date. Meta's stock price was largely unchanged. The active secondary market performance of Broadcom's stock reflects investor optimism about the growth potential of its ASIC (Application-Specific Integrated Circuit) business. Broadcom's custom chip operations have become a significant pillar of its annual revenue, and its deep integration with core client Meta is poised to profoundly influence the competitive landscape of the global AI semiconductor market.
