Meta and Broadcom announcing a sweeping deal that extends an existing partnership between the two companies

for the design of Meta's custom in-house AI accelerators now through 2009.

McKenzie Segalis has that story in today's tech check.

Mac.

Hey, David.

So both of those names moving higher this morning.

But Broadcom is seeing the stronger reaction.

Is investors zero in

on the near-term winner here. But for Meta, this is a longer-term bet. They're following a

playbook that Google has used with Broadcom for years now to make in-house custom AI chips.

They're building out enough of these custom chip capacity to consume the output of multiple

power plants with a plan to ramp over the next three years.

That puts meta right alongside Google as one of Broadcom's most aggressive customers.

As it pushes to reduce its dependence on VINVIDIA and build cheaper, more energy-efficient AI infrastructure on its own terms,

and this is just one piece of a much bigger buildout. Meta

broke ground earlier this year on its 31st data center, the bulk some of them in the U.S.

It's spending up to $135 billion on CAPEX this year alone. It's locked in chip deals with

Infidia, AMD, Arm on top of this expanded partnership,

and it unveiled four new custom AI chip designs just last month.

So meta, it's building out infrastructure at a pace that rivals Google, Amazon, and Microsoft.

But the key difference is that those three giants all have cloud businesses that generate revenue off that same infrastructure.

Meta doesn't. Every dollar it spends on chips and data centers has to pay for itself largely through ads.

...