A Morgan Stanley report suggests that if Google begins selling its custom Tensor Processing Units (TPUs) to other tech giants like Meta, it could significantly boost both revenue and earnings. Analyst Brian Nowak projects that selling just 500,000 units could add $13 billion to Google Cloud's 2027 revenue, an 11% increase, while raising overall earnings per share by 3%, or $0.37 per share.
This sales forecast is contextualized against Nvidia's projected 8 million GPU shipments in 2027. The report sees a potential market for 500,000 to 1 million Google TPUs annually, a move that would also benefit co-designer Broadcom. The impact on competitors like Nvidia and AMD is expected to be contained.
The analysis highlights Google's massive spending on AI hardware, estimated at $20 billion on Nvidia products this year versus over $10 billion on its own TPUs. It suggests the market will not have a single winner, leaving room for specialized chips like the TPU.
ICgoodFind: Google's entry as a potential TPU vendor would intensify competition in the AI accelerator market, potentially driving innovation and offering customers more choice.
