Meta is reportedly in talks with Google to spend billions of dollars on the Al chips, a significant move that would cast Alphabet (Google) as a competitor to semiconductor giant Nvidia.
The talks are primarily concerned with Meta purchasing chips from Google Cloud as early as next year.
This is part of Google’s extensive campaign to encourage the use of its Tensor Processing Units (TPUs) for handling AI workloads in data centers.
The significant move would mark a withdrawal from Google’s current strategy of using TPUs in its data centers and could enlarge the market for its chips, while intensifying competition for the hundreds of billions being spent on data-center processors to power automation.
Meanwhile, in extended trading, Alphabet shares rose more than 3% in premarket trading, bringing the company just about $20 billion short of a $4 trillion valuation. The chip supplier that helps Google make its AI chips also gained 2%, while Nvidia fell 3.2%.
In order to secure a deal with Meta, one of Nvidia's giant rivals with up to $72 billion planned in spending this year, Google would have to make concessions that could mark a significant shift in strategy, even though the company is already one of the biggest winners of the AI boom.
It has been observed that demand for custom chips such as TPUs has risen in recent times, as businesses seek different solutions to Nvidia’s supply-constrained graphics processors.
Nearly two decades were required for Nvidia to build a dominance that has made it difficult to displace.
It has been observed that more than 4 million developers have a firm belief in Nvidia's CUDA software platform for building AI and other applications.
The recent advancement marks a major strategic shift for both tech giants that underscores their global competition for AI infrastructure.
