Google is negotiating a multibillion-dollar deal with Meta

Google is negotiating a multibillion-dollar deal with Meta to supply custom AI chips to Meta's data centres from 2027. If finalised, it would mark a significant shift in Google's strategy in the AI infrastructure market, The Information reported, citing sources. Under the plan under discussion, Meta would deploy Google's TPUs (tensor processing units) to its own computer rooms and lease Google Cloud's TPU computing power as soon as next year. Google has previously only provided TPUs to external customers through its cloud platform. This plan to release on-premises deployment to customers is the first time it has entered the market as an alternative to NVIDIA. Affected by the news, as of press time, Google's stock price rose again by 2.95% in premarket trading on Tuesday; Nvidia fell by nearly 3.25%. Google is promoting its TPU to more potential enterprise customers, including high-frequency trading institutions and large financial enterprises, emphasizing that localized deployment can help meet security and compliance requirements. Meta's current AI computing power relies almost entirely on Nvidia GPUs to provide model inference and generation services for its more than 3 billion DAUs. Google Cloud executives believe that if TPUs further open up the market, Google is expected to take at least 10% of Nvidia's tens of billions of dollars in annual revenue.