Everybody But Nvidia And TSMC Has To Make It Up In Volume With AI

We keep seeing the same thing over and over again in the AI racket, and people keep reacting to it like it is a new or surprising idea. So we will say it very clearly here one more time: The only companies that are making money – meaning additional gross and operating profits, and sometimes meaning “material revenue” as the US Securities and Exchange Commission uses that term  – on the GenAI boom right now are Nvidia and Taiwan Semiconductor Manufacturing Co.

Everybody else in the AI system and model supply chain, as far as we can tell, is either losing money fist under hand or diluting their profits by expanding into AI. What financial people call “operating profit accretive but operating margin dilutive.” Broadcom, for all of its might and prowess in networking and other switchery in the datacenter, where it thankfully has very good operating margins, is no exception. And so, we see that Broadcom, like other chip suppliers as well as OEMs and ODMs higher up in…