Why Alphabet’s Own AI Chips May Be Its Quietest Advantage

Alphabet has begun selling its custom-designed TPU (tensor processing unit) AI chips directly to customers this year, creating a new revenue stream alongside its thriving cloud and advertising businesses. With Google Cloud growing 82% in Q2 and a $514 billion backlog, analysts project TPU-related infrastructure revenue could reach $3 billion in 2026 and $25 billion in 2027. This move gives Alphabet greater control over AI hardware costs and reduces reliance on Nvidia, though TPU sales remain early-stage with most revenue expected in 2027.