Meta Plans To Spend Billions Of Dollars On Google Chips

JAKARTA Meta Platforms is reportedly in talks with Google to buy chips made by Alphabet's parent company worth billions of dollars starting in 2027, as The Information reports. This move has the potential to make Google a serious competitor to semiconductor giants Nvidia.

In the talks, Meta is also said to be considering the option of renting Google Cloud chips starting next year. This deal is part of Google's strategy to encourage more companies to use the Tensor Processing Units (TPU) Google-made chips designed specifically for AI computing needs in their own data center.

If realized, this step marks a major change from Google's previous strategy of using only TPUs at its own data center. This expansion can also significantly expand Google's chip market and put companies directly in competition for hundreds of billions of dollars spent on data center processors to run AI services.

Some Google Cloud executives believe the strategy could help Google seize up to 10% of Nvidia's annual revenue, a billion-dollar sum, according to the report.

Alphabet shares rose more than 4% in pre-market trading Tuesday, November 25 opening up opportunities for companies to reach a historical valuation of $4 trillion if the increase persists. Broadcom in collaboration with Google in AI chip manufacturing rose 2%, while Nvidia fell 3.2%.

If Meta one of Nvidia's biggest subscribers with a spending plan of up to 72 billion US dollars this year signs a chip deal with Google, that move would be a huge achievement for Alphabet. Google itself has become one of the main winners of a generative AI boom thanks to growing demand for its AI cloud services. Alphabet, Meta, and Nvidia have yet to provide official comments.

Demand for special chips like TPU has increased sharply in recent years, as companies seek alternatives other than the expensive and hard-to-get Nvidia GPU. Last month, AI startup Anthropic announced the expansion of cooperation with Google to use up to 1 million Google AI chips, worth tens of billions of dollars.

Google has strengthened in recent months thanks to investment from Warren Buffett's Berkshire Hathaway, the rapid growth of its cloud units, as well as strong preliminary reviews of their latest AI model, Gemini 3. Disposing of Nvidia chips to customers remains a huge source of revenue for Google's cloud division.

However, to compete with Nvidia's dominance, Google has to face a big challenge: nearly two decades of Nvidia's proprietary software ecosystem that makes it difficult to replace. More than 4 million developers worldwide rely on Nvidia's CUDA software platform to build AI and others.