Alphabet’s Google has placed an order with Intel to construct more than three million tensor processing units in 2028.
Although it hasn’t yet placed an order with the business, Nvidia is also assessing whether Intel’s technology can be used to create a CPU that combines four graphics units into a single unit, according to the article.
Due to indications of sustained turnaround progress under CEO Lip-Bu Tan, Intel’s shares increased more than 9% in early trade and are expected to contribute to the roughly 169% rise so far this year.
The possible order for Google’s in-house AI processors would strengthen Intel’s contract chip manufacturing division and open a new chapter after years of management errors as the corporation attempts to reclaim its chipmaking crown, which it lost to Taiwan’s TSMC.
The AI surge has caused chip demand to soar, making it difficult for TSMC to deliver enough chips.
A number of significant AI chip design firms have turned to Intel as a result of the capacity shortage.
According to Jacob Bourne, a technology analyst at eMarketer, the development is “evidence that AI’s biggest players are racing to diversify a supply chain still heavily concentrated in TSMC.”
Since Tan took over, SoftBank, Nvidia, and the Trump government have invested billions of dollars in Intel.
Additionally, it secured Tesla, the first significant client for its next-generation 14A manufacturing process, which would produce chips for Elon Musk’s Terafab project, a sophisticated AI chip complex he has envisioned in Austin.
According to an official last month, the Trump administration has also been attempting to generate business for Intel.
“Google and Nvidia are significantly more driven than usual to collaborate with Intel, going beyond the typical requirement to diversify.”
According to D.A. Davidson analyst Gil Luria, “supporting Intel supports U.S.-based manufacturing, which is important for the relationship with the U.S. administration.”
The Wall Street Journal revealed last month that, after more than a year of intense negotiations, Intel had achieved a preliminary agreement to produce some chips for Apple, opening new tablet products.
Google, on the other hand, has been working to make its in-house AI chips a competitive alternative to Nvidia’s leading GPUs, and the company’s cloud revenue is growing as a result of sales of its tensor processing units.
