Google expands TPU sales through Oracle as AI chip push broadens

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Google expands TPU sales

Highlights

Alphabet announced Oracle will offer Google’s TPUs to customers externally, marking the first time these chips are available outside Google infrastructure.
Google Cloud revenue is expected to rise about 90% year-over-year, following 82% growth in Q2, with TPUs contributing to this momentum.
The expanded TPU rollout positions Google as a stronger competitor to Nvidia in the AI chip market, signaling a strategic shift in customer access.

Oracle partnership opens external TPU access

As reported by CNBC, Alphabet says Oracle will offer Google’s tensor processing units, or TPUs, marking the first time customers can access the chips outside Google’s own infrastructure. The announcement comes a day before Alphabet’s third-quarter earnings report and highlights a shift from Google’s long-running strategy of selling chips, models and cloud services together in a single stack.

Google has spent years arguing that customers benefit from buying its artificial intelligence tools in one place, an approach that rivals Amazon and Microsoft have also tried to build. By extending TPU availability through Oracle, Google is pushing its equipment beyond its own cloud in an effort to reach more customers and expand in a chip market that Nvidia has dominated.

The decision also points to cloud chief Thomas Kurian’s search for additional growth avenues. Kurian, who joins Google in late 2018 after spending more than 20 years at Oracle, is now steering part of the company’s AI infrastructure strategy through an outside cloud provider.

Cloud growth adds momentum to chip strategy

Investors are already watching Google Cloud as a major driver of Alphabet’s expansion. Analysts expect Google Cloud revenue to jump about 90% from a year earlier, after growing 82% in the second quarter, with TPUs contributing to that momentum.

Market watchers say the broader TPU rollout could strengthen Google’s position against established chip suppliers. Chris Ballard, managing director of Check Capital Management, says Google is a strong competitor and could eventually take market share from Nvidia, while Harding Loevner portfolio manager Uday Cheruvu says the company’s approach to serving customers is changing.

In our earlier article on the soaring costs and bottlenecks facing U.S. AI data center expansion, we explored how financing pressure, construction delays, and power constraints are slowing the buildout of new computing capacity. We also noted that only a minority of announced projects look credible, as higher interest rates, cost overruns, and local pushback test investor confidence and the economics of long-term contracts.

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