(Bloomberg) — Nvidia Corp. shares fell on a report that Meta Platforms Inc. is in talks to spend billions on Google’s AI chips, suggesting the internet search leader is making headway in efforts to rival the industry’s bestselling AI accelerator.
Meta is in discussions to use the Google chips — known as tensor processing units, or TPUs — in data centers in 2027, The Information reported, citing an unidentified person familiar with the talks. Meta also may rent chips from Google’s cloud division next year, the news outlet said.
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An agreement would help establish TPUs as an alternative to Nvidia’s chips, the gold standard for big tech firms and startups from Meta to OpenAI that need computing power to develop and run artificial intelligence platforms.
Shares of Nvidia slumped as much as 2.7% in after-hours trading. Google’s owner Alphabet Inc. gained 2.7%, adding to a recent surge on optimism over the latest version of its Gemini AI model.
Google previously sealed a deal to supply up to 1 million of its chips to Anthropic PBC, drawing attention to the potential for long-term challenges to Nvidia’s dominant market position.
After the Anthropic deal was announced, Seaport analyst Jay Goldberg called it a “really powerful validation” for TPUs. “A lot of people were already thinking about it, and a lot more people are probably thinking about it now,” he said.
Representatives for Meta declined to comment, while Google didn’t immediately respond to requests.
What Bloomberg Intelligence Says
Meta’s likely use of Google’s TPUs, which are already used by Anthropic, shows 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. Meta’s capex of at least $100 billion for 2026 suggests it will spend at least $40-$50 billion on inferencing-chip capacity next year, we calculate. Consumption and backlog growth for Google Cloud might accelerate vs. other hyperscalers and neo-cloud peers due to demand from enterprise customers that want to consume TPUs and Gemini LLMs on Google Cloud.
– Mandeep Singh and Robert Biggar, analysts
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Asian stocks related to Alphabet surged in early Tuesday trading in Asia. In South Korea, IsuPetasys Co., which supplies multilayered boards to Alphabet, jumped 18% to a new intraday record. In Taiwan, MediaTek Inc. shares rose almost 5%.
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