By George Budwell, PhD, The Motley Fool
Publication Date: 2025-12-04 10:05:00
Alphabet’s decade-long bet on custom silicon is finally paying off.
Nvidia (NVDA 1.03%) looks unstoppable. The company has just posted $57 billion in quarterly revenue, with its data center business growing at a 66% annual rate. CEO Jensen Huang also discussed $500 billion in chip demand visibility through 2026. With a market share of around 90% in artificial intelligence (AI) accelerators, Nvidia has become the default infrastructure provider for the generative AI era.
But Alphabet (GOOGL +1.21%) (GOOG +1.46%) has been quietly building an alternative. And it’s starting to matter.
Image source: Getty Images.
A real competitor emerges
Alphabet began designing its own AI chips in 2013 — years before ChatGPT made “AI” a household term. The Tensor Processing Unit (TPU) originated as an internal project designed to meet the computational demands of Google’s Search and Translate services. Today, it has evolved into a commercial platform that directly competes with Nvidia’s data center GPUs.
The latest generation, TPU v7 Ironwood, closely matches Nvidia’s flagship Blackwell chips in raw compute power, as demonstrated in published benchmarks, while offering advantages in system-level efficiency for specific workloads. More importantly, Google Cloud now makes these chips available to external customers — and some of the biggest names in AI are taking notice.
Nine of the top 10 AI labs now use Google Cloud infrastructure. Apple trained its foundation models for Apple…
