Broadcom Bets Big on AI Native VMware—But It’s a Long Game

In a landscape where every major tech player is chasing large language models, AI-built stack upgrades, and cloud-native hype, Broadcom’s recent move to make VMware AI-native signals not just opportunism—but a strategic shift. Yet beneath the product announcements lies a balancing act: modernizing legacy infrastructure without alienating the enterprise base that still counts heavily on the old guard.

VMware, Broadcom & the AI Push

Since acquiring VMware in November 2023, Broadcom has faced criticism over licensing policy changes. These include the ending of VMware’s free tier, reports of pressure on customers to renew or upgrade, and legal disputes over existing agreements—including those for perpetual licenses. These shifts have prompted some customers to explore alternative vendors like Nutanix, SUSE, and IBM.

Now, Broadcom is pushing VMware toward being “AI native.” The company announced at its VMware Explore conference that VMware Cloud Foundation (VCF) will come with new AI-oriented features. One of the headline outcomes is VMware Private AI Services, expected to ship with VCF 9 subscriptions. This service aims to provide all the essential tools for running AI on-premise or in environments outside hyperscaler clouds.

What “AI Native” Means in Practice

The expectations for this shift are ambitious. Broadcom intends to embed a model store, vector databases, indexing services, an “agentic” AI builder, and an API gateway for inter-model communication in VMware’s infrastructure stack.

In effect, the goal is to let organizations run AI workloads—potentially large language models, or smaller open-source ones—inside their own data centers, or at least closer to their legacy infrastructure footprint. This is significant. Many enterprises still use heavily virtualized, on-prem environments that are complex and difficult to migrate. Broadcom is banking on the inertia of those environments.

Risks, Tensions, and What’s at Stake

Modernizing VMware’s stack is not without perils. Deep integration of AI features into existing virtualization tools means the possibility of breaking changes. End users may suffer performance degradation, compatibility issues, or migration risks as Broadcom re-architects parts of VMware’s platform.

Moreover, customers are already sensitive to licensing and cost models. Shifts in what features are free, what’s paid, and how licensing works in AI components could trigger backlash—especially for businesses with long-standing VMware investments. The credibility of Broadcom’s promises may rest on whether these changes are incremental and reliable, rather than disruptive.

Why It Might Be a Good Bet

Even with the risks, there are compelling reasons why this direction could pay off for Broadcom.

Enterprises today are looking for simpler ways to deploy AI. Many firms are hesitant about cloud lock-in, data privacy, or latency issues. Being able to deploy AI models on-prem or in hybrid settings offers a level of control that is increasingly attractive.

Additionally, Broadcom is leveraging VMware’s existing installed base. Rather than trying to displace VMware, Broadcom seems to be enhancing it—potentially making customers more likely to stay rather than switch.

And finally, AI demand is increasing across infrastructure layers. From vector databases to agents to model orchestration, many parts of the AI stack are still emerging. If Broadcom can deliver solid, integrated tools at this level, it can capture value across multiple verticals—spanning infrastructure, operations, and developer tools.

Looking Long-Term

Broadcom’s path to an AI-native VMware is less about making headlines today and more about shaping the foundations for future enterprise infrastructure. The real value and risk lie in how reliably, transparently, and compatibly Broadcom can evolve VMware for AI.

If done well, this could mean VMware platforms that support AI workflows out-of-the-box, giving customers a smoother bridge between legacy virtualization, hybrid cloud, and AI-powered systems. If done poorly, it might erode trust, complicate licensing, and force some users to consider alternatives more seriously.

Final Thoughts

Broadcom is making AI a core part of VMware’s future. VMware Cloud Foundation will include built-in services and tools for deploying AI workloads closer to customer infrastructure. Customers, however, are wary due to recent licensing controversies and the costs and risks associated with migrating or upgrading.

The success of this strategy depends on careful engineering, minimal disruption, and transparent communication around cost and licensing. For the long term, Broadcom stands to benefit significantly if it can position VMware as the infrastructure backbone for AI in enterprise settings.