Earlier this year, Nvidia CEO Jensen Huang downplayed the threat of other companies building competing AI chips, including Google.
“Without Anthropic, why would there be any TPU growth at all?” he said in an interview with podcaster Dwarkesh Patel, referring to Google’s custom chips. “It’s 100% Anthropic.”
That is no longer the case.
On Tuesday, Google and Oracle announced a blockbuster deal that will see Google’s TPUs, short for Tensor Processing Units, made available to Oracle cloud customers from next year. As the companies underscored in a joint announcement, it’s the first time Google’s TPUs have been offered on a hyperscaler’s platform beyond its own.
Anthropic isn’t the only one Nvidia should be worried about. OpenAI currently has a job listing for a software engineer to optimize its models for TPUs, and The Information reported Tuesday that OpenAI plans to buy TPUs from Google.
Meanwhile, several analysts have predicted Google’s TPU business is about to explode as more companies hedge their bets with a multichip strategy — providing an opening for Google and others to further move onto Nvidia’s turf.
Despite this, Nvidia’s chip business still eclipses everyone else’s, including Google, which is also a big customer of Nvidia’s GPUs. Yet Google’s AI chips, which the company began building more than a decade ago to power search and other products, might be poised for takeoff.
In its IPO paperwork filed this week, Anthropic said it planned to spend $114.5 billion on Google compute between April 2026 and July 2033. While it didn’t say how much of that would be going to TPUs specifically, it did estimate spending between $125 billion and $150 billion for TPU capacity from Google and other providers.
In the same filing, Anthropic said it’s also using Amazon’s Trainium chips and AMD’s GPUs, in addition to chips from Nvidia and Google.
All told, this might be Nvidia’s nightmare scenario coming true. If companies are increasingly using a multichip strategy, it could hamper Nvidia’s pricing power.
Google declined to comment, and Nvidia and OpenAI did not respond to requests for comment.
TPU takeoff?
Google’s TPU business may only be getting started.
In notes published this month, Japanese banking group Mizuho projected TPU revenue of $28 billion for 2026 and $67 billion in 2027. Mizuho said Google could see that number reach as high as $100 billion in 2028, while TD Cowen’s John Blackledge projected it could reach $138 billion, accounting for 34% of Google Cloud’s 2028 revenue.
That number is still dwarfed by Nvidia, which reported $96.2 billion in revenue in the previous quarter alone, and the market reacted with a shrug on Wednesday as its share price stayed flat.
Some analysts, though, think the market is underestimating Google, especially as more companies look to reduce their reliance on Nvidia’s GPUs.
“We believe Google’s TPU hardware business is emerging as a materially larger opportunity than what is currently reflected in consensus estimates,” Mizuho analysts wrote in a note published October 18, adding that selling TPUs outright — rather than renting them from Google’s own data centers — could ease Google’s aggressive capex spending.
And even if that spending continues to soar — and right now, there are no signs the foot is coming off the accelerator — analysts at Bank of America said Google’s cash-splashing looks “relatively efficient” compared to its peers, as TPUs continue to power the company’s own AI efforts.
For Google, it’s the payoff of a decade-plus investment in silicon that was originally designed to make Search smarter. It could also act as something of a buffer against damage to its core search business as AI agents eat Google’s lunch, Mizuho also said this month.
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