Google Begins Selling AI Chips for the First Time
Alphabet (GOOGL) has started selling its custom artificial intelligence chips known as tensor processing units (TPUs), marking a shift from previously only offering them through Google Cloud. This new product line is still in early stages, with most revenue expected to come by 2027. Broadcom (AVGO) plays a key role by supplying the TPUs and other components for AI racks under long-term agreements that extend until 2031. Broadcom's recent financial results show significant growth in its AI semiconductor segment, driven largely by these contracts with Google. Alphabet benefits both from direct TPU sales to customers as well as continued cloud-based rental revenue. The move into hardware sales could diversify Alphabet’s income and strengthen customer relationships while offering new opportunities for partners like Broadcom.
Topics: Alphabet Broadcom Google Cloud semiconductor sales TPUs