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Source: Google Cloud
Google has placed an order with Intel for the production of over 3 million tensor processors by 2028, according to The Information.
Google aims to develop its own AI chips to provide a viable alternative to the dominant Nvidia graphics processors. The sales of tensor processors are becoming a key growth driver for the company’s cloud services.
Google’s order for its own AI processors will enhance Intel’s position in the contract chip manufacturing sector. The company is working to regain its leadership in chip production, a position it lost to Taiwan’s TSMC after several years of management missteps.
Currently, TSMC is facing challenges in meeting supply demands due to a sharp increase in chip demand associated with the AI boom. According to The Information, several large AI chip developers have turned to Intel due to production capacity shortages.
Nvidia is exploring the possibility of utilizing Intel’s technology to create a processor that combines four graphics chips into a single module. However, they have yet to place an order and are currently testing Intel’s latest packaging technologies and the 18A (1.8 nm) process node.
Tesla has become the first major client to use Intel’s next-generation 14A (1.4 nm) production process for Elon Musk’s Terafab project, aimed at creating a facility for advanced AI chip production in Austin.
Last month, according to the Wall Street Journal, Intel also reached a preliminary agreement to produce certain chips for Apple after more than a year of intensive negotiations.
The announcement of the manufacturing partnership between Google and Intel reflects the major players in the AI sector’s desire to diversify supply chains, which still largely rely on TSMC. In addition to the standard need for diversification, both Google and Nvidia are particularly keen on collaborating with Intel. Intel’s support contributes to domestic production growth in the U.S., which analysts view as significant for relations with the American administration.
Since Pat Gelsinger became CEO of Intel, the company has attracted billions in investments from the Trump administration, as well as from Nvidia and SoftBank. This year, Intel’s stock has risen by more than 150% amid signs of stabilization under his leadership.