Google is reportedly moving its custom AI chips beyond Google Cloud, pitching them to independent cloud providers as a direct challenge to Nvidia. The push lands as UBS trims price targets on Alphabet and Meta ahead of second-quarter earnings.
Google is trying to sell its custom tensor processing units directly to independent cloud providers, a step that would take the chips beyond Google Cloud and put them in front of Nvidia’s core customers. According to The Information, cited by Stocktwits, the TPUs have so far lived almost entirely inside Google’s own facilities and been rented out only through Google Cloud.
Google courts Nvidia’s neocloud customers
The company is pitching the chips to “neoclouds” — young providers built around renting out Nvidia GPUs. One reported target is Nscale, a two-year-old neocloud in which Nvidia is a major investor and preferred shareholder. Google’s pitch centers on more stable performance and simpler server networking than GPUs, particularly as Nvidia’s newer Grace Blackwell and upcoming Vera Rubin systems have caused deployment headaches for buyers.
Nvidia reportedly learned of the talks and discussed financial incentives with Nscale that one source said were meant to keep the neocloud away from TPUs, a characterization Nscale disputed. Wider TPU adoption could also help Google claim a larger share of production at TSMC, where Nvidia is currently the biggest customer.
Wall Street trims targets before earnings
The report landed during a broader reassessment of AI infrastructure spending. UBS on Monday cut its Alphabet price target to $400 from $410, keeping a ‘Neutral’ rating, and lowered Meta’s target to $766 from $865 while keeping a ‘Buy’. Both moves were tied to the companies’ upcoming second-quarter results.
Morgan Stanley took a more constructive long-term view, raising capital expenditure forecasts for Meta and Amazon and expecting hyperscaler AI spending near $1.2 trillion in 2027 and $1.4 trillion in 2028. Meanwhile, GOOG stock edged 0.5% lower in midday trade on Monday amid a market sell-off, while the tech-heavy Nasdaq-100 took the biggest hit and Nvidia’s shares fell nearly 3%.
Alphabet is scheduled to report Q2 earnings on July 22, with Wall Street expecting $2.90 per share on revenue of $116.8 billion.
Source: Stocktwits
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