Meta could be about to buy a lot of Broadcom chips to build its metaverse

data center
(Image credit: Future)

Meta could be set to splash the cash on buying some (very expensive) data centre chips. 

According to JP Morgan analysts (via Reuters), Meta is planning on using custom chips developed by Broadcom to power its metaverse dreams. 

Application-specific integrated circuit (ASIC) chips will drive between $2 billion and $2.5 billion in revenue for Broadcom in 2022, driven by deals from Meta, Google, and other giants. 

Powering the metaverse

"We believe these wins are primarily at 5 nanometre and 3 nanometre and will be used to power Meta's metaverse hardware architecture that it will deploy over the next few years," said JP Morgan's Harlan Sur. 

Sur believes that Meta will spend around $1 billion per year on Broadcom chips over the next three or four years, making it the second such customer after Google. 

ASIC chips are specifically designed for intensive AI applications that require huge processing power all at once. Google has been co-developing ASIC chips with Broadcom since 2016, in a deal worth over $1.3 billion in 2022. 

Everything, everywhere, all at once 

Meta plans to spend around $10 billion per year, as it did in 2021, to build the metaverse, a concept that remains difficult to define, even by Meta's own executives

One of the hardest things is that beyond a fancy PR video, created using CGI, the exact contours of what the metaverse will look like remain up for debate. 

The broad principles are there – socialising, working, playing, and so on – but getting there is going to take several years. 

Buying chips from Broadcom, who have a history of making them, rather than developing its own (as was originally planned), could be recognition from Meta that starting from absolute zero is a very challenging road indeed. 

Broadcom is having a pretty massive few weeks, having recently announced its plan to acquire VMware for $61 billion.

Max Slater-Robins has been writing about technology for nearly a decade at various outlets, covering the rise of the technology giants, trends in enterprise and SaaS companies, and much more besides. Originally from Suffolk, he currently lives in London and likes a good night out and walks in the countryside.