Demand for Google’s TPU Chips ‘Challenges NVIDIA’s Dominance’

New research from Omdia highlights the rapid growth in demand for Google’s Tensor Processing Unit (TPU) AI chips, a trend that may be strong enough to start chipping away at NVIDIA’s market dominance in GPUs.

Third quarter results from Broadcom, whose Semiconductor Solutions division acts as a custom chip outsourcing partner for Google, Meta, and several other AI players, give our analysts some insight into purchasing trends and information that is typically kept under wraps – how many custom processors is Google buying?

Broadcom’s CEO Hock Tan has repeatedly revised up his target for AI semiconductor revenue, aiming for $12 billion for this year. Based on this, it is estimated that Google’s TPUs could account for somewhere between $6 billion – close to Omdia’s existing estimates – and $9 billion, depending on the breakdown between compute and networking devices.

This figure includes a substantial number of Meta’s MTIA chips, with a project for a mysterious third client expected to ramp up in 2025.

Alexander Harrowell, principal analyst at Omdia noted: “Even though there is some uncertainty in the exact ratio between compute and networking devices, shipments of TPUs, even at the lower $6bn estimate, are growing at a pace fast enough to take share from NVIDIA for the first time.

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“It’s worth noting that Google’s Cloud Platform business continues to grow as a share of Google’s revenue while improving profitability. This could indicate that TPU-accelerated instance types or AI products running on TPUs are driving the growth at Google Cloud, especially as accelerator instance types are high-margin products.”