AI Market Leaders on the Rise: Broadcom and Nvidia Dominate the Field

The world of artificial intelligence (AI) is in motion, and some companies stand out by recording impressive increases in revenue and profit. Among these pioneers are Broadcom and Nvidia, which excel through remarkable performance in their market segment. Broadcom scores particularly well with specialized integrated circuits (ASICs) used in data centers. These help renowned technology companies expand their capabilities in the field of generative AI. CEO Hock Tan reports on the development of new AI chips for three major customers, each planning to deploy one million chips by 2027. ChatGPT creator OpenAI is also collaborating with Broadcom to develop in-house AI chips. The company benefits from the growing demand of tech giants and saw its AI revenue increase by 220% to $12.2 billion in 2024. Further growth is anticipated, with potential revenues of $60 to $90 billion projected for the 2027 fiscal year alone. These assumptions do not seem entirely unfounded in light of a Goldman Sachs study that predicts $1 trillion in tech industry spending on AI infrastructure in the coming years. Nvidia, on the other hand, dominates the semiconductor market with its graphics processing units (GPUs) and has established itself as the primary choice for data centers. As the competition for supremacy in the field of generative AI intensifies, the demand for their chips continues to rise. Approximately 70% to 95% of AI data centers rely on Nvidia's GPUs, leaving competitors significantly behind. Nvidia's management is working diligently to secure this lead by launching new AI hardware like the Blackwell chips. CFO Colette Kress emphasizes that all customers are vying to deploy these latest chips in their data centers first. The strong figures from the third quarter support this statement: revenues rose by 94% to $35.1 billion, while adjusted earnings increased by 103% to $0.81 per share, driven by a 112% increase in data center revenue to $30.8 billion.