Broadcom (AVGO, Financial) experienced a temporary 4% drop in its stock price following reports that Alphabet's Google plans to collaborate with MediaTek on designing and producing some of its artificial intelligence (AI) chips. This development suggests a potential shift in Google's strategy for AI chip production, which could impact its existing relationship with Broadcom.
Despite these reports, a Broadcom employee indicated that the company is still in discussions with Google to continue co-designing some of Google's AI chips. This ongoing negotiation highlights Broadcom's efforts to maintain its business relationship with Google amid emerging competition.
Meanwhile, Alphabet saw a slight increase of 0.2% in its stock, reflecting a stable market reaction to the news.
