Broadcom CEO Hock Tan goes one-on-one with Jim Cramer

Broadcom & OpenAI Deal - Broadcom's stock surged nearly 10% following the announcement of a major deal with OpenAI, marking the latest in a series of significant data center agreements [1] - Broadcom is investing in and enabling select customers to run their Large Language Models (LLMs) due to a shortage of compute capacity [3] - OpenAI's valuation is over $500 billion, with strong revenue growth, making them a worthwhile partner for Broadcom [10] Power & Infrastructure - The power needed for compute is substantial, potentially requiring the equivalent of 18 Hoover Dams [4] - Usable power is key, with a shift towards distributed power sources of 50-200 megawatts, rather than relying on single large sources like 1-2 gigawatt facilities [6] - Companies like Oracle, Google, Meta, and Microsoft have access to available power, but making these sites usable is the challenge [5][6] Broadcom's Strategy & Market Position - Broadcom focuses on a select group of players creating "super intelligence" or generative AI, emphasizing customized silicon at scale [6] - Broadcom has been working on custom AI accelerators for eight years, starting with Google, and continues to learn and engage deeply [6] - Broadcom defines customers as those who provide production purchase orders at scale, indicating a hard-nosed business approach [12] - The demand for compute capacity is doubling every year, creating ample opportunity for multiple players in the market [17] - VMware, acquired two years ago, is performing extremely well, generating significant free cash flow while growing [18] Generative AI Outlook - Generative AI is viewed as a critical utility for society and a secular trend, not a cyclical one [19][20] - Knowledge-based technology industries account for 30% of global GDP (approximately $110 trillion), and generative AI could increase this to 40%, representing a $10 trillion annual growth [21]