Google and Oracle announced a deal that will put Google's TPUs in front of Oracle cloud customers from next year. Nvidia's share price stayed flat on Wednesday, while analysts project rapid growth in Google's TPU revenue.
Google is moving further onto Nvidia's turf. On Tuesday, the two companies announced a deal to offer Google's Tensor Processing Units, or TPUs, to Oracle cloud customers from next year. The companies said it is the first time Google's TPUs have been offered on a hyperscaler's platform beyond its own.
Nvidia's CEO downplayed the TPU threat
Earlier this year, Nvidia CEO Jensen Huang told podcaster Dwarkesh Patel about Google's custom chips: "Without Anthropic, why would there be any TPU growth at all?"
Anthropic is not the only company Nvidia should worry about, according to Business Insider. OpenAI 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. In its IPO filing, Anthropic said it planned to spend $114.5 billion on Google compute between April 2026 and July 2033.
Anthropic also said it uses Amazon's Trainium chips and AMD's GPUs alongside chips from Nvidia and Google. If companies increasingly use several chip types, it could hamper Nvidia's pricing power, according to Business Insider.
Analysts see a TPU revenue ramp
On Google's third-quarter earnings call, chief financial officer Anat Ashkenazi said the company expects a meaningful revenue ramp in 2027 from TPU sales. Cloud chief Thomas Kurian said TPU sales were a meaningful contributor to Q3 financials.
Mizuho projected TPU revenue of $28 billion for 2026 and $67 billion in 2027, and said it could reach as high as $100 billion in 2028. TD Cowen's John Blackledge projected it could reach $138 billion in 2028, or 34% of Google Cloud's revenue that year.
Those figures remain smaller than Nvidia's. The chipmaker reported $96.2 billion in revenue in the previous quarter alone, and its share price stayed flat on Wednesday.
Some analysts think the market is underestimating Google as more companies look to reduce their reliance on Nvidia's GPUs. Bank of America analysts said Google's spending on capex looks relatively efficient compared with its peers.
Source: Business Insider
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