GPU CPU TPU.

Perfect timing, Google. One day after the sneaky link himself (read: Nvidia CEO Jensen Huang) admitted to an affair with an alleged Chinese spy, Google rolled out two new versions of its tensor processing units, or TPUs (think: Google’s homemade answer to Nvidia’s GPUs). Alphabet shares popped as much as 3.2% premarket, while Nvidia shed 5% premarket on the scandal.

ICYMI, Jensen is having a worse day than you. U.S. intelligence reportedly believes Alice Huang (no relation), an exec at Megaspeed, a Singapore data center company that’s one of Nvidia’s biggest customers in Southeast Asia, has been passing information to Beijing. Nvidia’s board launched an independent probe, though it says it has “no reason to believe” any secrets were compromised. Babe wake up, New Cold War just dropped…

As for Google, the new TPU 8tx handles “confidential computing” (read: protection… which Jensen apparently forgot). It encrypts data at the chip level, so information never sits unlocked in memory while it’s being processed. It also hooks up with a CPU from AMD, which is run by Jensen’s actual cousin.

The 8i Max crams two TPUs into a single package for AI that needs long context windows (read: how much a model can remember at once), like coding and drug discovery. Both are reconfigured versions of the chips Google dropped in April, and both arrive next year.

Per Google chip chief Amin Vahdat, “the future is going to be about specialization.” Sure, bro. Funny enough, even Nvidia agrees. The GPUs-for-everything company now sells its own CPUs, plus inference chips built on the Groq tech Santa Huang bought last Christmas Eve.

Friendly reminder, Google started building TPUs with Broadcom over a decade ago to stop paying the Nvidia tax handle its own search computing more efficiently. Now it’s selling them to everyone else. They cost about 30% less than Nvidia’s GPUs while doing a competitive job crunching data, per Bloomberg Intelligence’s Mandeep Singh. Meaning, TPUs are basically the Kirkland Signature of AI chips. 

That pitch has landed Apple, Meta, and Oracle, all of which still buy plenty of Nvidia. These hoes ain’t loyal… BI expects TPU sales, including related hardware and software, to top $135B by 2028, up from about $12B this year, which, yuge if true. Oh, and last month Google added Jump Trading (yes, the Terra Luna guys) to the client list.

Of course, it’s going to be an uphill battle. Nvidia still still runs the AI chip market, and the only reason Google has an opening is that Jensen can’t make GPUs fast enough. The anti-data-center wave that swept Democrats into power could also trim Big Tech’s $1.4T AI spending plans by 5-7% in 2027, per BI. And TPU margins are thinner than Nvidia’s (because, discount).

Name a fate worse than your biggest rival launching a chip that keeps secrets from China the day after your Chinese-spy affair goes public. You literally can’t.

Your move, Jensen…

Until next time, friends! 

At the time of publishing, Stocks.News holds positions in Google, Apple, and Meta as mentioned in the article.