Google Reportedly Taps Intel for AI Chip Production Amid Supply Chain Diversification
Alphabet's Google has reportedly placed a significant order with Intel for over three million in-house AI chips in 2028, aiming to diversify its supply chain. Nvidia is also exploring Intel's capabilities. This move could boost Intel's contract manufacturing business as AI chip demand strains existing capacity.
Key points
- Alphabet's Google has reportedly ordered more than three million custom AI chips from Intel for production in 2028.
- Nvidia is also reportedly evaluating Intel's technology for its own processors, though no order has been placed.
- The potential deal aims to diversify chip supply chains, which are heavily reliant on TSMC.
- Intel's shares saw a significant rise following the report, indicating positive market reaction to its contract manufacturing prospects.
- Reuters could not independently verify the report, and Intel, Alphabet, and Nvidia declined to comment or did not immediately respond.
A new report suggests that Alphabet's Google has placed a substantial order with Intel for the manufacturing of over three million custom-designed AI chips, slated for production in 2028. This potential deal, reported by The Information and citing sources with knowledge of the discussions, marks a significant effort by Google to diversify its semiconductor supply chain.
The report further indicates that Nvidia is also examining Intel's manufacturing capabilities for a processor that integrates four graphics chips. While Nvidia has not yet placed an order, its evaluation highlights growing interest in alternatives to current dominant manufacturers. The global demand for AI chips has surged, putting immense pressure on existing foundries like TSMC, prompting major players to seek broader manufacturing partnerships.
This development could be a crucial step for Intel in its bid to regain prominence in the semiconductor manufacturing sector and bolster its contract chipmaking business. Analysts view this as evidence of major AI companies actively working to diversify a supply chain currently concentrated with Taiwan Semiconductor Manufacturing Company (TSMC).
Sources
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