Did Anthropic, Alphabet, and Broadcom Just Say Checkmate to Nvidia?

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Broadcom (NASDAQ: AVGO) announced some monstrous news the other day. Anthropic, the makers of one of the leading generative artificial intelligence (AI) models, Claude, announced that starting in 2027, it will be deploying next-generation Tensor Processing Units (TPUs).

TPUs are custom AI chips designed by Broadcom and Alphabet, so seeing these two expand their partnership with Anthropic is a huge deal, especially with the success of some of Anthropic's models.

However, it leaves a huge question mark regarding the world's largest company: Nvidia (NASDAQ: NVDA). Nvidia was commonly seen as the best option for training AI models, as its GPUs and the ecosystem around them have no rivals. With Anthropic deploying TPUs, did Alphabet and Broadcom just say checkmate to Nvidia by beating it at its own game? Let's take a look.

Image source: Getty Images.

Broadcom recently predicted huge custom AI chip growth

Broadcom is the rising star in the AI computing realm. It's taking a unique approach to the field by offering AI chips designed to customer specifications. Alphabet and Broadcom's TPU is the best example of this collaboration, and there are several other AI hyperscalers that are set to have a Broadcom-designed custom chip launch in the next few years.

Broadcom saw all of this coming and informed investors during its latest earnings call that it sees monstrous growth ahead.

At the end of Q1 of fiscal year (FY) 2026 (ended Feb. 1), Broadcom's AI semiconductor revenue was $8.4 billion, up 106% year over year. Custom AI chips are a part of that grouping, but Broadcom's CEO, Hock Tan, believes that custom AI chips alone will generate more than $100 billion in revenue by the end of 2027. That's booming growth, and will result in Broadcom being one of the best AI investments over the next few years.

What is less clear is the impact it will have on Alphabet. It's unknown how much Alphabet is going to take from the sale of each of these computing units and where it will be accounted for in Alphabet's results. It may show up in Google Cloud, which has already delivered stellar revenue growth. In Q4, Google Cloud's revenue increased 48% year over year, a sharp rise from Q3's 34% growth. If we see Google Cloud's revenue continue to rapidly accelerate, then I think these TPU sales are to be given a lot of the credit.

But what does this say about Nvidia?

Nvidia is still the king

The reality is that Nvidia's computing capacity is likely sold out, or nearly sold out, through 2027. So, Anthropic needed to get access to more computing power and turned to Alphabet and Broadcom to deliver it.

In the same press release, Anthropic noted that it uses three chips to train its Claude generative AI models: Google's TPUs, Nvidia's GPUs, and Amazon Trainium chips (which are custom-designed by Amazon). So, just because Anthropic made an announcement about increasing its deal with Broadcom and Alphabet doesn't mean that it is switching away from Nvidia entirely.

This would be a dumb move anyway, because if Anthropic was locked into using TPUs from Broadcom and Alphabet, those two would have nearly unlimited pricing power, as it would be very difficult to switch. By maintaining a balanced usage approach, Anthropic can keep all of its computing unit suppliers in check.

None of this news has touched Nvidia's growth projections. Wall Street analysts still expect 79% revenue growth during its upcoming quarter and 71% for the entire fiscal year. Those are monster growth rates that indicate the demand for Nvidia's products.

Nvidia is still a great AI investment pick, but other alternatives also make sense. I think the AI cohort will thunder back this year, making them smart stocks to buy now while they're still down from their all-time highs.

Keithen Drury has positions in Alphabet, Amazon, Broadcom, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Broadcom, and Nvidia. The Motley Fool has a disclosure policy.