"As application-specific chips, TPUs are more energy-efficient and potentially cheaper than NVIDIA's more general-purpose hardware. This could set the stage for a major shift, especially as Google considers selling TPUs externally, including to Meta (NASDAQ: META), transforming what was once an internal tool into a large commercial business. As one example of TPU's spreading influence, in their latest conference call Broadcom (NASDAQ: AVGO) announced their agreement to sell TPU chips to Anthropic has now reached $21 billion by the end of 2026."
"A core theme in this debate is the total cost of ownership-the combination of chip price, energy usage, and performance-which remains difficult to measure but is crucial to determining whether TPUs can truly undercut NVIDIA. Recent reports from Semi Analysis claim TPUs already offer lower total cost of ownership than NVIDIA's current generation, which caused significant pressure on NVIDIA shares in recent weeks."
Google's custom TPUs compete with NVIDIA's GPUs for AI compute, offering greater energy efficiency and potentially lower costs due to their application-specific design. Google considering external TPU sales, including to Meta, could convert an internal tool into a major commercial product. Broadcom's agreement to sell TPU chips to Anthropic reached $21 billion by the end of 2026, influencing Broadcom's revenue outlook relative to Wall Street forecasts. Total cost of ownership—chip price, energy usage, and performance—remains the decisive metric, with Semi Analysis reporting TPUs may already deliver lower TCO than NVIDIA's current generation. TPU-linked stocks have surged, although NVIDIA is expected to remain competitive.
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