Meta is reportedly exploring the use of Google’s tensor processing units (TPUs) in its data centers, with potential adoption as early as 2027 (25/11). The Information also reported that Meta may rent TPUs from Google Cloud next year.

A Google spokesperson told CNBC, “Google Cloud is experiencing accelerating demand for both our custom TPUs and NVIDIA GPUs; we are committed to supporting both, as we have for years.”

Nvidia Stock Falls on Chip News

Shares of Nvidia fell as much as 7% before recovering to trade down 4.3% following the report. Alphabet, Google’s parent company, rose 4.2% after a 6% rally on Monday.

Advanced Micro Devices (AMD) shares fell 6%, and Arm shares dropped 4.2% amid market reactions to the news.

Google’s TPU Offers Competitive Edge

Google first launched its TPU in 2018 for internal cloud use. Since then, the company has developed advanced versions to handle AI workloads efficiently.

Experts say TPUs give Google an advantage over competitors by offering highly efficient AI solutions. Meta’s possible use of TPUs would be a major validation for Google’s technology.

Diversification in AI Infrastructure

Nvidia remains the market leader with its GPUs, which underpin most AI infrastructure. However, companies are seeking a more diversified supply of chips to reduce reliance on Nvidia.

Gil Luria, head of technology research at D.A. Davidson, said, “There was some sense that [AMD] could be the number two [in the market] and now it’s become clear that there may not be room for that.”

Impact on AI Semiconductor Players

Broadcom, which helps design Google’s TPUs, rose more than 1% following an 11% gain the previous day. Meta is one of the largest AI infrastructure spenders, projecting capital expenditures of $70–72 billion this year.

The share price movements come amid ongoing debate about a potential “AI bubble” and stretched valuations for technology companies.

PHOTO: REUTERS/DADO RUVIC

This article was created with AI assistance.