Google and Meta strike multibillion-dollar AI chip deal as tech giants race to scale AI infrastructure

Google signs multibillion-dollar AI chip deal with Meta, Information reports

Feb 26 (Reuters) - Meta Platforms (META.O), opens new tab has signed a deal to rent Google's (GOOGL.O), opens new tab AI chips, known as tensor processing units, to develop new AI models, the Information reported on Thursday, citing a person involved in the talks. The multi-year deal is worth billions of dollars, the report added. Meta and Google did not immediately respond to Reuters' requests for comment. Reporting by Fabiola Arámburo in Mexico City; Editing by Maju Samuel Our Standards: The Thomson Reuters Trust Principles., opens new tab

Google and Meta reportedly strike new, multibillion-dollar AI chip deal - SiliconANGLE

Google and Meta reportedly strike new, multibillion-dollar AI chip deal Meta Platforms Inc. has reportedly agreed a multibillion-dollar deal to rent Google Cloud's custom artificial intelligence chips, according to a report in The Information today. The report cited anonymous sources as saying that the chips, known as tensor processing units, will be used by Meta to train and run its next-generation large language models. Large enterprises like Meta have been lavishing billions of dollars on advanced processors as they race to build up the infrastructure they need to power AI workloads, and Google has identified it as a significant opportunity for growth. The AI chip industry is currently dominated by Nvidia Corp.'s graphics processing units, which power the vast majority of AI applications in the world today, but Google's TPUs are a compelling, lower-cost alternative. In recent years, TPUs have become one of the most important growth engines for Google's cloud infrastructure platform, and the company believes there's a real opportunity to increase its market share. Google launched its most advanced TPUs, called Ironwood, in November. Customers have the option to scale up to 9,216 Ironwood TPUs into a single server pod that's linked by high-speed interconnects to provide up to 9.6 terabits per second of bandwidth. The chips can be connected to a colossal 1.77 petabytes of shared high-bandwidth or HBM memory. According to Google, the Ironwood chips can deliver more than 118-times the FP8 ExaFLOPS of its nearest competitor and four-times better performance for training and inference than Trillium, its previous generation TPU. One of the first companies to adopt the new TPUs was Anthropic PBC, which touted the massive price-performance gains they provide, enabling it to serve massive Claude models at scale. Earlier, Google announced it had struck a deal with Anthropic worth "tens of billions of dollars" to give it access to one million TPUs through its cloud infrastructure platform. Today's deal is important for Meta as it looks to diversify its AI hardware away from Nvidia. The social media giant is one of Nvidia's biggest customers, and earlier this month announced a multibillion-dollar deal to buy millions of the company's next-generation Vera Rubin GPUs when they become available later this year. But Meta doesn't want to be tied to a single chip provider, and has also established a relationship with one of Nvidia's biggest rivals in Advanced Micro Devices Inc. Earlier this week, the Facebook parent said it's going to buy billions of dollars' worth of AMD's AI chips, including its newest Instinct MI400 series GPUs. In addition, Meta also received an option to buy a 10% stake in AMD, but that will only happen if its collaboration with the chipmaker meets agreed performance milestones. Meta's deal with Google allows it to further diversify its AI hardware supplier base, and there are good reasons for it to want to do so. Each type of AI processors has its advantages and disadvantages, so the social media giant will be able to pair the optimal silicon with each kind of AI workload. In addition, by playing off different chipmakers against one another, it can potentially secure favorable prices as it looks to build out its AI infrastructure. Meanwhile, Google has ambitions to break Nvidia's stranglehold on the AI chip market. It knows that enterprises want alternatives to Nvidia's GPUs, and it's determined to take advantage of that. Historically, its TPUs have only been available through the Google Cloud platform, meaning customers could only rent access to them. But now Google wants to sell the chips directly to customers so they can run them in their own, private data centers. By doing so, it believes it can grab up to 10% of Nvidia's data center revenue in the next few years. The Information's report said Meta is currently talking to Google about buying millions of TPUs for its own data centers. That would be a separate deal to today's agreement, which only relates to cloud access. However, no agreement has been reached so far, the report said. Less clear is what today's deal means for Meta's own in-house chips. The company last updated its custom Meta Training and Inference Accelerator or MTIA chips in 2024, and has reportedly been working with Taiwan Semiconductor Manufacturing Co. on a new design that was expected to launch sometime this year. The next-generation MTIA chips are reportedly optimized for AI model training, which is an area where its first-generation processors struggled. However, it's believed that the company has been experiencing "technical challenges" with the new chips that appear to have delayed their rollout.

Meta signs multibillion-dollar deal to rent Google TPUs for AI training

Meta Platforms has signed an agreement to rent Google's tensor processing units through Google Cloud to develop new AI models. The deal marks a major expansion of Google's TPU commercialization strategy, which previously restricted the chips to its own internal use and select cloud customers. Meta is also in discussions to purchase TPUs outright for installation in its own data centers as soon as next year. The agreement allows Meta to diversify its compute supply beyond Nvidia and AMD, supporting a projected $135 billion in AI infrastructure spending by 2026. Google is forming a joint venture to lease TPUs to other AI customers, underscoring a broader push to challenge Nvidia's dominance in the AI hardware market. Some Google Cloud executives estimate expanding TPU sales could capture as much as 10% of Nvidia's annual revenue. On February 24, Meta and AMD announced a multiyear deal for up to six gigawatts of AMD's Instinct GPUs. The deal is valued at up to $60 billion over five years and includes an equity warrant that could give Meta as much as 10% of AMD's stock. A week earlier, Meta expanded its partnership with Nvidia to deploy millions of Blackwell and next-generation Vera Rubin processors. Meta CEO Mark Zuckerberg stated the AMD deal is an important step for Meta to diversify its compute and deliver personal superintelligence. Morningstar analysts described Meta's approach as a "multipronged silicon strategy." The strategy leverages Nvidia for frontier model training, AMD for inference needs, Google's TPUs for possible Llama workloads, and Meta's in-house MTIA chips for core recommendation algorithms. Google first developed TPUs more than a decade ago for internal AI workloads. In October 2025, Anthropic signed a deal worth tens of billions of dollars for access to up to one million TPUs. In December, Google collaborated with Meta on a project called "TorchTPU" to ensure full compatibility between TPUs and the PyTorch software framework. The Wall Street Journal reported that Google has been expanding financial support for data center partners and exploring an investment in cloud startup Fluidstack to broaden TPU demand. The Guardian reported this week that Meta's multi-vendor approach reflects a scale of operations that demands several alternatives. Analyst Nguyen, quoted in the report, said Meta has already grown large enough to require several alternatives. Meta has plans for 30 data centers, with 26 located in the United States. The company's AI infrastructure spending is projected to reach as much as $135 billion in 2026.

Meta signs multi-billion-dollar deal to rent Google AI chips - The Information

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. The move is the latest in a series of bids from big tech companies to invest in AI development. Last week, AI chip giant Nvidia was reportedly considering a $30 million dollar investment into OpenAI. According to the report, Meta is still in talks with Google to buy Tensor Processing Units (TPUs), an alternative to GPUs, for its data centres next year. Earlier this month, Meta inked a deal with Nvidia to buy its current and future AI chips.

Meta signs multi-billion-dollar deal to rent Google AI chips: Report

Meta Platforms has reportedly secured a multi-billion dollar deal to rent Google's artificial intelligence chips for AI model development. This move follows Meta's recent agreements with AMD and Nvidia for AI chip acquisitions, underscoring the intense industry-wide investment in AI infrastructure. Google is also exploring TPU sales and joint ventures to capitalize on AI demand. Meta Platforms has signed a multi-billion dollar deal to rent artificial intelligence chips from Google to develop new AI models, The Information reported on Thursday, citing a person involved in the talks. The report of ⁠the ⁠multi-year deal comes as companies pour billions into chips and AI infrastructure to meet demand for artificial intelligence. Meta and Google declined Reuters' request for comment. Earlier this week, Advanced Micro Devices said it would sell up to $60 billion in AI chips to Meta. ⁠The Facebook owner earlier this month also signed a deal with Nvidia to buy its current and ⁠future AI chips. Reuters reported in December that Google was pushing to make its Tensor Processing Units (TPUs) a viable alternative to Nvidia's market-leading GPUs. TPU sales have become a crucial growth engine of Google's cloud revenue as it seeks to prove to investors that its AI investments are generating returns. The Information reported Thursday that Meta is also in talks with Google to buy the TPUs for ⁠its data centers as early as next year, though the status of those discussions could not be determined. Google has also signed an agreement with an unidentified large investment firm to fund a joint venture that would lease TPUs to other customers, the report added. (You can now subscribe to our Economic Times WhatsApp channel)

Google Scores Major Win As Meta Reportedly Agrees To Multi-Year AI Chip Rental Deal, Challenging Nvidia's Dominance - Advanced Micro Devices (NASDAQ:AMD), Corning (NYSE:GLW)

Mark Zuckerberg-led Meta Platforms, Inc. (NASDAQ:META) has reportedly struck a multi-billion-dollar deal to rent artificial intelligence chips from Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google. Meta Expands Its AI Chip Strategy Meta agreed to a multi-year arrangement to lease Google's Tensor Processing Units for developing advanced AI models, Reuters reported on Thursday (via The Information). Meta and Google did not immediately respond to Benzinga's request for comments. Meta Boosts AI Investment With AMD, Nvidia The Zuckerberg-led tech giant has significantly ramped up its AI spending in the past few weeks. Earlier this month, Meta and Nvidia revealed a long-term partnership focused on AI infrastructure to help Meta expand its data centers designed for AI training and inference. Google Pushes Its TPU Technology Google has been working to position its TPUs as an alternative to Nvidia's market-leading GPUs. The chips power much of Google's own AI systems and are available through Google Cloud. TPU sales have become an increasingly important part of Google's cloud revenue as the company seeks to demonstrate returns on its AI investments. The report said Meta is also in discussions to purchase TPUs for use in its data centers as soon as next year, though the status of those talks remains unclear. Price Action: Meta shares rose 0.51% during Thursday's regular session but fell 0.70% in after-hours trading to $652.43, according to Benzinga Pro. Alphabet's Class A shares fell 1.78% during Thursday's regular session and edged down another 0.042% in after-hours trading, while Class C shares declined 1.88% during the session and slipped an additional 0.11% after the bell. META earns a strong Quality rating in Benzinga's Edge Stock Rankings, though its price trend remains negative across the short, medium and long-term periods. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo Courtesy: Koshiro K On Shutterstock.com Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.