By Anthony Di Pizio, The Motley Fool
Publication Date: 2025-12-03 09:06:00
Google parent company, Alphabet, is coming for Nvidia in one of the world’s most lucrative hardware markets.
This day was inevitable. Hyperscalers like Alphabet (GOOG +0.29%)(GOOGL +0.29%), Amazon, and Microsoft have spent billions of dollars designing their own data center chips for artificial intelligence (AI) workloads, but until now, their hardware didn’t hold a candle to Nvidia‘s (NVDA +0.88%) industry-leading graphics processing units (GPUs).
On Nov. 18, Alphabet launched its new Gemini 3 AI model. It was quickly recognized as one of the best in the industry, delivering greater performance than the latest models from leading start-ups OpenAI and Anthropic. But here’s the real story: Gemini 3 was trained exclusively on Alphabet’s specially designed tensor processing units (TPUs) for the data center, so this could mark the beginning of the end of Nvidia’s dominance in the market for AI chips.
In fact, Meta Platforms is now reportedly in talks to buy TPUs directly from Alphabet, and Anthropic recently announced plans to expand its adoption of these chips through Google Cloud. What should Nvidia investors do?
Image source: Alphabet.
Google’s TPUs are in high demand
Google Cloud operates a number of centralized data centers fitted with AI chips, including thousands of its own TPUs in addition to Nvidia’s GPUs. Like most cloud providers, it rents the computing capacity to other businesses who use it to develop their own AI software, and this has become a very lucrative…
