Do you want to overtake NVIDIA Corporation? Report: Microsoft Corporation and Broadcom Inc. are discussing custom chips.

Microsoft Corporation (MSFT.US) is currently discussing the design of future custom chips with Broadcom Inc. (AVGO.US), a move that could mean Microsoft Corporation will shift its related business from its current supplier Marvell to Broadcom Inc. This move highlights the tech giant's strategic shift away from relying on NVIDIA Corporation (NVDA.US) in the midst of the artificial intelligence boom. On December 5th, according to the tech media The Information, a source familiar with the discussions revealed that Microsoft Corporation and Broadcom Inc. are in negotiations regarding custom chip design. If the collaboration is successful, Broadcom Inc. will replace Marvell as Microsoft Corporation's new partner in the custom chip field. The report states that this potential deal comes at a time when major tech giants are competing to acquire more semiconductors to expand their AI product lines. Broadcom Inc. is considered to be the most capable competitor challenging NVIDIA Corporation's dominant position in the semiconductor market. The company's positioning in the custom chip field is closely tied to CEO Hock Tan's preference for large transactions and decisive management style. This collaboration negotiation reflects the increasing competition in the custom chip market, with chip manufacturers actively pursuing orders from tech giants. Rising demand for custom chips As companies like Microsoft Corporation accelerate their AI product development, the demand for custom chips is rapidly increasing. Currently, NVIDIA Corporation dominates the semiconductor market, but tech companies are seeking to diversify their chip supply chain to reduce dependence on a single supplier. Custom chips can be optimized for specific AI workloads, providing performance and cost advantages for tech companies. This has prompted giants like Microsoft Corporation and Meta to increase their investment in the custom chip field. According to three sources involved in the development, Meta plans to launch this chip in 2027. The report also points out that this collaboration reflects the intensifying competition in the custom chip market. Two sources involved in the negotiations revealed that Marvell has recently taken a strategy of waiving some early engineering design fees in order to win more business from Meta. With its technological strength and scale advantage, Broadcom Inc. is vying for a larger market share in this competition. The company is seen as a major competitor to NVIDIA Corporation in the market.