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Google eyeing MediaTek for AI TPU manufacturing: Report

  • 18.03.2025 08:44
  • fonearena.com
  • Keywords: AI, Market Growth

Google is reportedly partnering with MediaTek to develop AI chips for its TPUs, aiming to reduce dependence on Nvidia while benefiting from lower costs and stronger ties with TSMC.

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Google is reportedly preparing to partner with Taiwan’s MediaTek to develop its next-generation AI chips, as Tensor Processing Units (TPUs), set to launch in 2026.

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The report noted that Google is not ending its long-standing partnership with Broadcom, the San Jose-based chip designer. A Broadcom employee emphasized that the relationship remains intact.

Context

Analysis of Google’s AI TPU Manufacturing Partnership with MediaTek

Key Facts and Data Points

  • Partnership Announcement: Google is reportedly collaborating with Taiwan’s MediaTek to develop next-generation AI chips (Tensor Processing Units - TPUs) for launch in 2026.
  • Ongoing Partnership: Google continues its long-standing partnership with Broadcom, with a Broadcom employee confirming the relationship remains intact.
  • AI Chip Strategy: Google designs custom AI server chips internally and rents them to cloud customers, similar to Nvidia’s strategy.
  • Market Demand: Rivals like Microsoft (OpenAI) and Meta Platforms face surging demand for Nvidia processors.
  • Google’s TPU Investment: Research firm Omdia estimates Google spent $6 billion to $9 billion on TPUs in 2024, based on Broadcom’s AI semiconductor revenue targets.

Market Trends and Business Impact

  • Reduced Dependence on Nvidia: Google aims to reduce reliance on Nvidia’s highly sought-after chips, gaining a competitive edge in the AI race.
  • Cost Efficiency: MediaTek was chosen due to its strong ties with TSMC (a top chip manufacturer) and lower per-chip costs compared to Broadcom.
  • Cloud Competition: This move strengthens Google Cloud’s position against competitors like AWS by offering alternative solutions to Nvidia’s dominant chips.

Competitive Dynamics

  • Comparison to Nvidia: Google’s strategy mirrors Nvidia, which designs custom AI chips for internal use and external sales.
  • Impact on Rivals: Microsoft-backed OpenAI and Meta Platforms face challenges due to Nvidia’s chip scarcity, while Google gains a strategic advantage.

Long-Term Effects and Industry Implications

  • Potential Market Expansion: Google’s in-house TPU development could expand its cloud offerings and attract customers seeking alternatives to Nvidia.
  • Technological Leadership: By crafting custom AI chips, Google positions itself as a leader in AI innovation, particularly with the 2026 TPU launch.

Strategic Considerations

  • Cost Optimization: Partnering with MediaTek for manufacturing could reduce production costs and improve supply chain efficiency.
  • Global Server Network Power: The new TPUs are designed to power Google’s global server network, enhancing its AI capabilities and cloud services.

This partnership underscores Google’s commitment to advancing its AI capabilities while addressing the growing demand for high-performance computing solutions in the cloud market.