Google $GOOGL ( ▼ 1.08% ) jumped after-hours last night and is climbing again in premarket trading this morning after a report said Meta $META ( ▼ 0.41% ) is in talks to buy billions of dollars worth of Google’s custom AI chips. Nvidia $NVDA ( ▲ 1.37% ) and AMD $AMD ( ▲ 3.93% )
are both sliding as investors digest what would be a rare competitive punch aimed directly at the GPU leaders.
The Information reports that Meta is exploring a deal to use Google’s TPUs inside its data centers starting in 2027, while also considering renting Google chips through Google Cloud as early as next year. If Google sells TPUs directly rather than only through its cloud platform, it would mark a major shift in strategy and could carve out a slice of the chip market worth roughly 10 percent of Nvidia’s annual revenue.
Google’s TPUs have been on a hot streak. They powered Gemini 3, the company’s new GenAI model that received rave reviews and helped send Google to record highs last week. They are also cheaper to operate than Nvidia’s GPUs, which only adds to their appeal among big AI builders.
The report says Meta is considering TPUs for both inference and training, the latter being the compute-heavy arena Nvidia has dominated for years.
Nvidia shares are down more than 4 percent and AMD is off more than 5 percent as of 8:30 a.m. ET. Google is up about 4 percent. Broadcom $AVGO, which codesigned the TPUs with Google, is also trading higher.
Nvidia CEO Jensen Huang recently played down the threat from custom chips, pointing to the strength of CUDA and the difficulty of high-performance inference. Meanwhile, Google has been making its JAX software more accessible for developers, improving PyTorch compatibility and making it easier to run custom code.
If Meta moves ahead, the AI chip race shifts from competitive to downright personal.