Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) has expanded its partnership with Broadcom Inc (NASDAQ:AVGO, XETRA:1YD) in a multi-year agreement that will run through 2029 and include an initial commitment to deploy more than 1 gigawatt of custom silicon capacity, as the social media giant accelerates its artificial intelligence buildout.
The deal covers both AI accelerators and networking infrastructure, marking a significant step in Meta’s push to develop in-house silicon and reduce reliance on third-party suppliers.
Broadcom said the collaboration will feature what it described as the industry’s first 2-nanometer AI accelerator, which it expects to serve as the foundation for a multi-year rollout of advanced computing systems.
Analysts at Wedbush said the transition to 2-nanometer technology is likely tied to Meta’s next-generation Meta Training and Inference Accelerator (MTIA) chips, including the MTIA 450 and MTIA 500, which are expected to begin shipping in the first half of next year.
They added that a more meaningful revenue ramp for Broadcom could emerge in 2027 as those products scale.
The initial 1 gigawatt deployment represents a sizable rollout for a new chip architecture, though Wedbush noted it remains modest relative to the broader AI infrastructure market dominated by companies such as Nvidia and internally developed systems like Google’s tensor processing units.
As a result, the brokerage said the competitive impact of Meta’s custom chips will depend less on the scale of the initial agreement and more on how the underlying technology evolves over time.
“(W)e continue to see AVGO's work with Meta as a potentially significant positive catalyst for Broadcom, but we also believe the magnitude of benefit will depend on how the technology develops and if indeed this deal is the beginning of GW's of deployments beyond the initial commitment,” analysts wrote.
Shares of Broadcom were up 3% on Wednesday afternoon while Meta shares gained 1.7%.