Google to sell its AI chips to outside cloud providers

Alphabet's ↗ 1.85% Google is moving to sell its custom Tensor Processing Units to independent cloud providers for the first time, targeting the fast-growing neocloud market that has long been dominated by Nvidia ↗ 0.25% GPUs, according to a report from The Information published on Monday.theinformation+1

Targeting Nvidia's Loyal Customers

Google has approached several neocloud companies, including Crusoe and CoreWeave ↘ 4.93%, about providing them with access to its TPUs, according to The Information. London-based Fluidstack has already signed a deal and will deploy the chips in a New York data center leased from TeraWulf ↘ 4.95%. As part of that arrangement, Google has provided a $3.2 billion backstop and taken an approximately 14 percent equity stake in Fluidstack.datacenterdynamics+1

The move represents a strategic shift for Google, which has historically kept its TPUs exclusively within its own cloud infrastructure. Neither Microsoft ↗ 1.09% nor Amazon Amazon.com, Inc. ↘ 0.23% has made its custom AI silicon available to third-party cloud providers outside their own data centers.datacenterdynamics

Building a Broader TPU Ecosystem

The neocloud push builds on a joint venture Google announced in May with Blackstone ↗ 0.98%, in which the investment firm committed an initial $5 billion in equity to create a new U.S.-based company offering TPU compute-as-a-service. That venture aims to bring 500 megawatts of TPU capacity online by 2027.blackstone+1

Google unveiled its latest-generation TPU, codenamed Ironwood, at its Cloud Next conference in April. The chip offers 192GB of high-bandwidth memory per chip, a sixfold increase over the previous-generation Trillium TPU.datacenterdynamics

Stakes in the AI Infrastructure Race

Google's existing TPU customers include Apple ↗ 0.94%, Anthropic, and Safe Superintelligence. In February, Reuters reported that Meta ↘ 0.08% signed a multibillion-dollar deal to rent Google's AI chips, with discussions ongoing about potentially purchasing TPUs for its own data centers.reuters+1

Morgan Stanley has projected that Google's TPU production could reach seven million units by 2028, potentially generating $13 billion in new revenue. A Google spokesperson told Data Center Dynamics that the company has "a long history of partnering with data center colocation providers" and called its new partnerships "an extension of that strategy as we focus on increasing capacity to meet customer needs".datacenterdynamics+1