Meta Eyes Google AI Chips

Meta Platforms is reportedly considering using Google's Tensor Processing Units (TPUs) in its data centres, potentially by 2027, and may also rent them via Google Cloud as early as next year. This move could challenge Nvidia's dominance in the AI chip market, where even AMD lags behind. Google's TPUs, first developed over a decade ago, are gaining traction as an alternative for training and running complex AI models.

Shares of Nvidia have fallen following the report, while Alphabet's stock has increased. Meta's potential use of Google's TPUs signals growing momentum for Google's chips as a viable alternative to Nvidia. Google has affirmed its commitment to supporting both its custom TPUs and Nvidia GPUs.

Analysts suggest that third-party providers of large language models are likely to leverage Google as a secondary supplier of accelerator chips for inferencing in the near term. Broadcom's shares have also risen, reflecting its role as Google's ASIC partner.