Core Insights - Broadcom Inc. has granted CEO Hock E. Tan a long-term equity award linked to the company's success in artificial intelligence, emphasizing the board's commitment to his leadership through the end of the decade [1][5] Compensation Structure - The award, approved on September 3, 2025, includes performance stock units that vest only if Broadcom meets specific AI revenue goals between fiscal 2028 and fiscal 2030, contingent on Tan remaining in his role [2] - At target, the grant covers 610,521 shares, with payouts ranging from zero if revenue does not exceed $60 billion to as much as 300% of target if revenue surpasses $120 billion in any four consecutive quarters [2] Strategic Positioning - The board believes that to compete successfully in a rapidly changing technology industry driven by AI, Broadcom must develop advanced technologies and execute new strategies to meet customer demand [3] - The "Tan PSU Award" comes as Broadcom positions itself at the center of the AI and cloud computing boom, expanding into custom AI accelerators, XPUs, ASICs, networking switches, and data center infrastructure products [4] Industry Dynamics - Broadcom's strategy highlights the importance of Tan's leadership during an unprecedented transformation in the semiconductor industry driven by AI [5] - The award also indicates Broadcom's intention to position its custom silicon as a competitive alternative to Nvidia's dominant AI processors [5] Market Developments - Tan confirmed that Broadcom secured a major AI chip customer, identified as OpenAI, with expectations that 2026 custom chip sales could exceed prior forecasts [6] - Analysts estimate that AI chip revenue could reach $20 billion in 2025, reflecting the growing demand in the market [6] Competitive Landscape - Following Broadcom's $10 billion custom chip deal with OpenAI, Citi analyst Atif Malik cut Nvidia's price forecast, warning of a potential 4% decline in Nvidia's 2026 GPU sales due to intensified competition [7]
Broadcom Ties CEO Fortune To Explosive AI Revenue Targets