Alphabet's AI Chip Potential

What happened

Alphabet has expanded the availability of its custom-designed Tensor Processing Units (TPUs), previously primarily for internal operations and Google Cloud Platform, to third-party data centres. These TPUs, optimised for AI models such as Gemini 3, are now projected for faster external adoption, with significant sales anticipated. This move, in partnership with Broadcom, signifies a broader market push for Alphabet's proprietary AI hardware, extending its reach beyond its direct cloud infrastructure.

Why it matters

The increased external availability of Alphabet's proprietary AI hardware introduces a new dependency for third-party data centres on a single vendor's specialised infrastructure. This raises due diligence requirements for procurement and platform operators regarding vendor lock-in, supply chain resilience, and the long-term operational costs associated with a specialised hardware and software ecosystem. It also creates a potential oversight burden for IT security and compliance teams in managing data processing environments increasingly tied to specific hardware architectures.