Google Expands AI Chip Ambitions with Meta Talks

Google is planning to sell Tensor AI chips to Meta, disrupting the competition with Nvidia and changing the landscape of the AI hardware.

Google is reported to have advanced discussions with Meta Platforms to distribute its Tensor AI chips, which is a significant change in its approach and intensifies its competition with Nvidia. Google can start to sell its TPUs to be used directly within the data centers of its customers, as reported by The Information, which means that it is expanding radically on its standardized model of providing access to cloud services.

In 2027, Meta intends to acquire billions of dollars of Google TPUs and rent Google Cloud capacity to TPUs as early as 2026. The relocation would lessen the dependency of Metacom on Nvidia GPUs, which now command the artificial intelligence device market.

The possible acquisition provides Google and its chip-design ally Broadcom a huge unexploited market. Analysts believe it may change the competitive landscape, as it is offering business entities an alternative to the Nvidia and AMD products.

Google stocks surged 2.6 percent in the after-hours trade after the report, and Broadcom rose 1.7 percent following its robust market day performance. Google shares also gained 6.3 percent in the morning, making it the new high.

Conversely, Nvidia shares fell 1.5 percent in expanded trade, and AMD plummeted 1.7. The Taiwan Semiconductor, which produces chips for several big players, finished marginally above its 50-day moving average, though.

As Google expands its AI chip sales, the semiconductor industry is likely to face significant competitive pressure.