Chipset manufacturer Broadcom, headquartered in San Jose, California, has bought VMware (Palo Alto, California) for NOK 657 billion.
The cloud must grow in step with AI use
The cloud and virtualization company has become part of Broadcom (data centers, cloud, and network infrastructure,) which started as part of HP many years ago, has managed to secure approval for the purchase in the very largest markets, including the EU, UK, Canada, and China.
The acquisition makes sense, but because they were both independently large, there was monopoly suspicion in the EU.
"That made VMware a logical target for Broadcom, but it also put the acquisition in the crosshairs of regulators in several regions," writes Engadget.
A new economic engine
In an interesting dispute, Broadcom managed to win the trust of the EU by providing the source code of its fiber optic component technology to arch-rival Marvell. The EU also concluded that the company will in any case face competition in the storage adapter and network card market.
The cloud and AI market are connected in several ways, because it is important for the consumer segment that the companies of an increasing number of AI/LLM services are fast. This applies to client queries to the web/cloud as well as locally on the device.
It is expected that Apple, for privacy reasons, will let the A18 chips, which will be launched in combination with the A18 in the autumn of next year, drive a new generation of Siri with LLM and that the computation will mainly take place on the device. Qualcomm has the same technology in its chipsets for Android, and this will also be one of the big selling points for mobiles in 2024.
LLMs are becoming increasingly important, because the technology can hear, see, and listen, but also because the market has stagnated in traditional areas such as CPU performance – instead, companies have turned their eyes to where they can increase performance: GPUs and nits of brightness on mobile screens. On a general basis, the AI segment will be the economic driving force engine for other markets, such as cameras and sensors, and in that way challenge the traditional input use with computers that has been dominated by screens, mice and keyboards.