Broadcom’s (AVGO) stock soared by more than 11% on Friday, adding a staggering $130 billion to its market valuation, following a blockbuster earnings report and a monumental announcement from its CEO. The catalyst for the surge was the revelation that a major new customer has committed to $10 billion in orders for the company’s custom artificial intelligence chips, known as XPUs.

While not explicitly named by Broadcom, industry analysts have identified the significant client as OpenAI. CEO Hock Tan confirmed that this “qualified customer” has placed production orders, which has directly led the company to increase its AI revenue forecast for the coming year. This partnership signals a major shift in the AI infrastructure landscape, with leading developers seeking custom silicon solutions to power their next-generation models.

The news also highlighted Broadcom’s technological edge. The company is reportedly developing an AI chip utilizing an advanced “2-nanometer node process,” a manufacturing feat that analysts at JPMorgan called an “industry first.”

This next-generation technology positions Broadcom ahead of rivals in the race for more powerful and efficient AI processors. As one analyst noted, these developments are cementing Broadcom’s role as the leading alternative to Nvidia in the accelerating AI chip market.

Unlike Nvidia, which sells general-purpose GPU chips, Broadcom specializes in designing custom ASIC accelerators tailored to the specific needs of large technology firms. This latest $10 billion deal underscores the growing demand for specialized AI hardware and solidifies Broadcom’s critical role in the ecosystem. The market reaction was stark, with shares of Nvidia and AMD falling simultaneously as investors repositioned around Broadcom’s breakthrough.