AI boost lifts Broadcom forecast amid lingering enterprise weakness

Broadcom Inc forecast second-quarter revenue above estimates, as increased investments in artificial intelligence spur demand for its chips used in data centres.

In a deteriorating economy, where both consumer and enterprise spending is on a decline, AI has emerged as a bright spot for chip firms such as Nvidia Corp and Broadcom, due to the technology’s strong potential applications as illustrated by OpenAI’s chatbot ChatGPT.

Broadcom expects to see “exponential” rise in demand for its networking solutions this year from hyperscale customers who are looking to deploy artificial intelligence in their systems, chief executive Hock Tan told analysts on an earnings call.