Alphabet's TPU Business Tops $50 Billion, Double Its Nearest Rival

Product / TechIndustry Impact 4
โดย The Motley Fool·US·Read original
Summary · why it matters

Google Cloud CEO Thomas Kurian revealed that Alphabet's Tensor Processing Unit chips business is more than twice the size of its next-closest competitor, putting it on track to generate over $50 billion per year. That rival is Amazon, whose custom chips business, including Trainium AI accelerators and Graviton CPUs, reached a $25 billion run rate in July. For reference, Alphabet reported $24.8 billion in revenue for the entire Google Cloud segment last quarter, so the TPU business alone is around half of that. Kurian said the average payback period for Alphabet's servers was less than two years, and TPU servers break even in half that time, compared with just under three years for AI servers in Amazon Web Services according to CEO Andy Jassy. Alphabet has also locked in some of its biggest customers with long-term commitments, many of them five years, giving it visibility into cash returns as it builds out data centers.

Impact on stocks 3

Artificial Intelligence± Mixed · 3 stocks
Alphabet Inc Class C
GOOG
▲ PositiveDemandrelevance

Alphabet's TPU business tops $50B annually, double its nearest rival, with long-term customer commitments giving visibility into cash returns.

Amazon.com Inc
AMZN
▼ NegativeCompetitionrelevance

Amazon's custom chip business (Trainium/Graviton) is described as less than half the size of Alphabet's TPU business and with a longer payback period, making it the losing rival in this comparison.

Theme Impact 5

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