Alphabet Inc. (GOOG) (GOOGL) shares extended their impressive rally Monday evening, climbing to fresh record highs after reports emerged that Meta Platforms Inc. (META) might deploy Google's AI chips in its data centers.
The Deal Taking Shape
According to The Information, Google is in active discussions with Meta and other cloud customers about a potential agreement that would put Google's AI chips to work in Meta's data center infrastructure. It's a significant development in the increasingly competitive AI chip landscape, where NVIDIA Corp (NVDA) has long held the crown.
The market reacted swiftly. Alphabet shares jumped roughly 2% in after-hours trading Monday, building on a more than 6% gain during the regular session. Meanwhile, Nvidia shares moved in the opposite direction, sliding about 2.05% after-hours.
Google's AI Chip Ambitions
The reports suggest Google is ramping up efforts to compete head-to-head with Nvidia in the lucrative AI chip market. Google's tensor processing units, or TPUs, are specifically engineered to optimize both performance and cost efficiency for AI workloads spanning from training to inference.
This isn't just about making chips—it's about challenging Nvidia's grip on the infrastructure powering the AI revolution.
A Stock on Fire
Alphabet has been on an absolute tear lately. The stock has rallied approximately 52% since mid-September, with much of the recent momentum driven by the release of Gemini 3, which has garnered overwhelmingly positive feedback from users and industry observers alike.
