Broadcom is developing a new AI-focused networking chip to compete with Nvidia's Spectrum networking dominance in mega-cluster connectivity.
Broadcom is launching the Thor Ultra networking chip on Tuesday, designed to enable companies to build artificial intelligence computing systems by connecting hundreds of thousands of data-crunching chips together. The Thor Ultra will compete with Nvidia's networking interface chips and strengthen Broadcom's dominance in network communications within AI-focused data centers. This announcement follows Broadcom's Monday unveiling of a deal to deploy 10 gigawatts of custom chips for OpenAI, beginning in the second half of 2026, directly challenging Nvidia's control of the AI accelerator market.
The AI opportunity represents significant growth potential for Broadcom. Chief executive Hock Tan stated late last year that the company's addressable market for its various AI chips ranges from $60 billion to $90 billion in 2027, split between networking chips and data center processors developed with partners including Alphabet's Google and OpenAI. In fiscal 2024, Broadcom reported AI revenue of $12.2 billion, and in September announced a new $10 billion customer for its custom data center AI chips.
The Thor Ultra operates as a critical link between AI systems and the broader data center, enabling operators to move information throughout a facility. According to Ram Velaga, a Broadcom senior vice president, "In the distributed computing system, network plays an extremely important role in building these large clusters," and he noted that participants in the GPU business recognize the importance of networking participation. Broadcom has generated billions of dollars in revenue through its work on multiple generations of Google's Tensor processor, which Google began designing over a decade ago.
Broadcom's engineers have doubled the bandwidth on the Thor Ultra compared with its prior version, subjecting the chips to rigorous testing and evaluation from the earliest production stages. The company constructs entire systems around its chips, collaborating with hardware teams to determine packaging requirements, power needs, and heat emissions. Rather than selling servers directly, Broadcom provides component designs and test systems to customers as reference points for building networking infrastructure. As Velaga explained, "For every dollar we invest in our silicon, there is at least $6 to $10 that our ecosystem partners are investing," emphasizing the company's focus on design in preparation for production rollout.