Google Steps Up Nvidia Pushback by Selling TPU Chips to Some Customers

Alphabet announced it will sell TPU (Tensor Processing Unit) chips in a form that gets installed in some customers' own data centers. Moving beyond the existing model of leasing TPU capacity from Google's data centers, this is a move to expand the market to target AI labs, capital markets firms, and high-performance computing demand as well.

CEO Sundar Pichai explained that as AI demand grows, Alphabet will provide TPUs to some customers in a way that includes hardware configuration as well. Alphabet has already unveiled TPU 8t (for training) and TPU 8i (for inference), and announced a multi-gigawatt-scale next-generation TPU deal with Anthropic, with the chips set to go live starting in 2027.

• A multi-billion-dollar chip deal with Meta was also reported.
• Amazon is likewise growing its AI infrastructure business with Graviton, Trainium, and Nitro chips.
• CEO Andy Jassy said Amazon's chip business annual revenue run rate exceeds $20 billion, and when accounting for indirect revenue as well, it's close to $50 billion.

As both Google and Amazon expand sales of their own chips, the AI semiconductor competition is spreading from a Nvidia-centered structure into a more complex multi-way contest.