Google's In-House AI Chip Strategy Could Be a Bigger Threat to Nvidia Than Investors Think. Here's Why.

Google is developing its own Tensor Processing Units (TPUs) that could reduce AI compute costs by up to 30% compared to Nvidia's chips. Through a joint venture with Blackstone, Google plans to deploy 500 megawatts of TPU capacity by 2027 and rent it to other tech companies via a neocloud model. As tech giants increasingly design custom processors for efficiency, Nvidia's dominant 86% market share and 74% gross margins could face significant pressure.