By Keith Speights
Publication Date: 2026-05-05 09:02:00
Google began using its first Tensor Processing Unit (TPU) in early 2015, several months before the company restructured to create a parent organization, Alphabet (GOOG 0.93%) (GOOGL 0.59%). For the next 11 years, Google kept TPUs to itself. The chips powered many applications hosted by Google Cloud, including Google’s own AI products.
While Google continues to use its TPUs internally, it’s no longer keeping them to itself. Alphabet CEO Sundar Pichai revealed during his company’s first-quarter earnings call last week that Google is selling AI chips for the first time. Could this surprising decision shake up the market that Nvidia (NVDA +0.04%) has dominated for years?
Image source: Getty Images.
Why Alphabet’s move is a big deal
Pichai explained in the Q1 call that there’s a simple reason why Alphabet is now selling TPUs: significant demand. He noted that “AI labs, capital markets firms, and high-performance computing applications” are driving demand for TPUs. As a result, Alphabet will deploy its TPUs to “a select group of customers in their own data centers.”
Importantly, Pichai also acknowledged that selling TPUs will expand Alphabet’s market opportunity. Alphabet CFO Anat Ashkenazi stated that the company will recognize a small percent of revenue from its TPU agreements later in 2026, with most revenue to be realized next year.
Investors shouldn’t have to worry that TPUs sales will negatively affect Google Cloud’s sizzling growth. The types of customers Pichai…
