Alphabet's Quiet AI Chip Bet Suddenly Looks Like Its Next Multi-Billion-Dollar Machine

Benzinga

Alphabet’s in-house tensor processing units are quickly becoming a potential new revenue engine as analysts forecast strong demand and a large market opportunity. The chips have helped fuel a 31% rally in Alphabet shares this quarter, and analysts told Bloomberg the TPUs could grow into a major business line. DA Davidson’s Gil Luria said the TPU business could ultimately surpass Google Cloud in value, while Morgan Stanley estimated that selling 12 million units could add about $13 billion in revenue by 2028. Alphabet hinted at external TPU sales through a multibillion-dollar supply agreement with Anthropic and ongoing talks with Meta. Google shares traded 0.65% higher at $321.70 in Thursday’s premarket session.

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00:00It's Benzinga, bringing Wall Street to Main Street.

00:03Alphabet's in-house Tensor Processing Unit chips are emerging as a potential new revenue engine

00:08as analysts project strong demand and a sizable market opportunity, according to Benzinga.

00:13The chips have helped drive a 31% rally in Alphabet shares this quarter,

00:18and analysts told Bloomberg that TPUS could become a major revenue driver.

00:23Gil Luria of DA Davidson said that TPUS could eventually surpass Google Cloud in value,

00:28and Morgan Stanley estimates that 12 million units could add roughly $13 billion to Alphabet's revenue by 2028.

00:36Alphabet signaled possible external TPU sales through a multibillion-dollar supply agreement with Anthropic

00:41and reported discussions with Meta.

00:44Google shares were up 0.65% at $321.70 pre-market on Thursday.

00:50For all things money, visit Benzinga.com.

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