Alphabet CEO Sundar Pichai announced during the company's first-quarter earnings call that Google is selling AI chips for the first time. The company will deploy TPUs to "a select group of customers in their own data centers," driven by demand from "AI labs, capital markets firms, and high-performance computing applications."
TPUs are more cost-effective and energy-efficient than competing GPUs for certain AI workloads, though GPUs offer greater flexibility. Alphabet CFO Anat Ashkenazi stated the company will recognize a small percent of revenue from TPU agreements later in 2026, with most revenue realized in 2027.
A D.A. Davidson analyst estimated Google's TPUs could gain around 20% market share if sold externally. However, Nvidia CEO Jensen Huang stated that Google's TPUs do not present a significant threat to Nvidia's GPU business, claiming Nvidia is "a generation ahead of the industry."
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