Meta adds exec from key chip partner to board

By Max A. Cherney and Stephen Nellis

(Reuters) -Meta Platforms on Wednesday added Broadcom CEO Hock Tan to its board of directors, bringing on the head of a company known for its networking chips.

Broadcom is one of Meta’s key partners in both its data center ambitions and effort to design its own chips and also offers services to help customers design their own chips for artificial intelligence (AI) work.

The technology to create chips that move and crunch data quickly has become a key battleground as AI systems ingest huge amounts of information.

In a regulatory filing connected with Tan’s appointment to its board, Meta said it spent about $500 million on components and design services from Broadcom in 2023.

While Nvidia commands top market share in all-purpose AI chips, all the of the largest technology companies – including Meta, Google, and Microsoft – are also designing specialized custom chips to complement Nvidia’s offerings.

Reuters reported earlier this month that Nvidia itself is now courting custom chip clients.

Tan has used Broadcom as a corporate vehicle to build an empire of loosely related technology companies that analysts say more closely resembles private equity portfolio focused on cash flow rather than a traditional operating company.

Broadcom last year closed a $69 billion deal to purchase VMware and shortly thereafter cut about 1,300 jobs.

Meta on Wednesday also said that John Arnold, a former energy trading executive at Enron now involved in high-voltage transmission line electricity projects, is joining its board of directors.

(Reporting by Max Cherney and Stephen Nellis in San Francisco and Kannaki Deka in Bengaluru; Editing by Anil D’Silva and Sonali Paul)