Investing.com -- Broadcom (NASDAQ: AVGO) shares rose about 3% in premarket trading Wednesday after the chipmaker announced an expanded multi-year partnership with Meta to design and supply several generations of custom AI processors, extending the tie-up through at least 2029.

The deal, announced Tuesday, covers multiple generations of Meta’s custom silicon under its MTIA (Meta Training and Inference Accelerator) program, spanning chips for both training and inference workloads, as well as Broadcom’s Ethernet networking technology to connect Meta’s growing AI computing clusters.

The initial commitment exceeds one gigawatt of computing capacity, which Broadcom described as "the first ​phase of a ⁠sustained, multi-gigawatt rollout."

Meta CEO Mark Zuckerberg said the partnership would help "build out the massive computing foundation we need to deliver personal superintelligence to billions of people."

The first MTIA chip, the MTIA 300, already powers Meta’s ranking and recommendation systems, with three additional generations planned through 2027.

As part of the expanded arrangement, Broadcom CEO Hock Tan will step down from Meta’s board and move into an advisory role focused on the company’s custom silicon roadmap and infrastructure strategy.

Bernstein analyst Stacy Rasgon said the move made sense given the scale of the relationship.

"The depth and scale of the partnership is such that it is becoming challenging to manage potential conflicts; as such we are not concerned by the move (it’s likely a positive read frankly).”

Commenting on the deal, Rasgon said the move “does not seem hugely incremental to medium-term AVGO numbers vs what the company shared in March, though the 2029 timeframe does appear new.”

He believes the new timeframe could “potentially offer some more support and perhaps giving more comfort on the sustainability of demand visibility over the next several years.”

The analyst said Broadcom’s previously guided fiscal 2027 AI revenue target of around $100 billion was looking "increasingly light," with upside feeling likely. He noted that every $10 billion in additional AI revenue translates to roughly $1 per share in earnings for the chip giant.