I'm not your dad: Broadcom bought VMware and fired half of itPremium: The Hater's Guide To Broadcom

In 2024, not long after Broadcom bought VMware, CEO Hock Tan sat down for a coffee chat with staff. Someone asked whether the company offered the kind of perks they were used to, things like childcare or counselling. His answer: 'Why would I do any of that? I'm not your dad.'

Over the following months, half of VMware's 38,000 people were gone. Thirteen of the eighteen campus buildings were sold, and the espresso machines with them.

The name is borrowed, and so is the tech

Today's Broadcom is enormous: Apple just signed a $30 billion deal for custom chips, and Broadcom supplies the wireless parts in phones, the networking gear in data centres, and Google's TPUs.

But it is not the Broadcom founded in 1998. That company was swallowed by Avago, a semiconductor arm spun out of Hewlett Packard and raised by private equity, which then took the name for itself. It is why the ticker is still AVGO.

The playbook is Oracle's: buy a company, then raise prices, cut staff and cut costs. In 2018 it tried to buy Qualcomm for $117 billion; Trump blocked it on national security grounds, with the security review worried Broadcom would cut R&D. That worry had something behind it — in Tan's years as CEO, he spent six times as much on acquisitions as on research.

One leg left to stand on

After the VMware purchase, Broadcom's R&D fell to 9.8% of revenue, near the bottom of its peer group and below everything but NVIDIA — which is the most valuable and most profitable company on the US market, so it gets a pass.

So where does growth come from? AI, and Broadcom did not chase it. Google's TPU orders pushed it there. AI went from 19.2% of revenue in the first quarter of fiscal 2024 to 56.4% by the third quarter of fiscal 2026. Analysts expect 68.4% in fiscal 2027 and 81.9% by fiscal 2029.

Who are the customers? OpenAI, for its Jalapeno chip, and Anthropic, buying Google's TPUs. Both lose money. Billions of Broadcom's future revenue rest on whether two unprofitable companies keep paying the bill.

In one line: Broadcom does not invent things, it collects other people's inventions into a sack — and the bottom of that sack is now held by two invoices that leak.