Google plans to partner with MediaTek to develop next-gen AI chips: Report

Google plans to partner with MediaTek to develop next-gen AI chips: Report

  • 17.03.2025 18:39
  • thetechportal.com
  • Keywords: AI

Google is collaborating with MediaTek to develop next-generation AI chips, aiming to enhance its AI capabilities and reduce production costs. This partnership underscores Google's efforts to compete in the AI race while maintaining ties with Broadcom for chip design. The move highlights the growing importance of AI hardware in advancing tech innovation.

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Estimated market influence

Google

Positivesentiment_satisfied
Analyst rating: N/A

Google is collaborating with MediaTek to develop next-gen AI chips, enhancing their AI capabilities and market position.

Alphabet

Alphabet

Positivesentiment_satisfied
Analyst rating: Buy

Alphabet's investment in AI chips supports Google's efforts to stay competitive in the AI race.

Context

Business Insights and Market Implications

Overview

  • Google plans to collaborate with MediaTek to develop next-generation AI chips, aiming to enhance its position in the AI industry and provide more powerful processing options for cloud customers.

Partnership Details

  • Collaboration: Google is partnering with MediaTek, a leading semiconductor firm, to produce advanced AI chips.
  • Benefits:
    • MediaTek offers more competitive pricing per chip compared to Broadcom, potentially reducing production costs.
    • MediaTek’s relationship with TSMC ensures access to advanced semiconductor fabrication technologies.

Financial and Investment Insights

  • Investment in TPUs: Google invested $6–$9 billion last year in developing, producing, and deploying Tensor Processing Units (TPUs).
  • Efficiency Claims:
    • TPUs are reported to be 15–30 times faster than traditional CPUs/GPUs.
    • They consume significantly less electricity, delivering 30–80 times more work per unit of power consumed.

Market Trends and Competition

  • Global AI Chip Market:
    • Valued at $73.27 billion in 2024.
    • Projected to reach $927.76 billion by 2034, indicating massive growth potential.
  • Competitive Landscape:
    • Google faces competition from global tech giants like OpenAI, Anthropic, Microsoft, and Meta, which are also investing heavily in AI.

Strategic Considerations

  • Diversification of Partnerships:
    • While Google continues to collaborate with Broadcom for certain chip designs, the partnership with MediaTek adds flexibility and reduces dependence on Nvidia.
  • Internal Developments:
    • Introduction of sixth-generation TPUs in late 2024 as an alternative to Nvidia processors.
    • Ongoing investments in AI models (e.g., Gemini Robotics) and cloud capabilities.

Long-Term Implications

  • Alphabet’s Commitment:
    • Alphabet plans to invest $75 billion in AI in 2025, reflecting its commitment to staying ahead in the AI race.
  • Market Impact:
    • The partnership with MediaTek could strengthen Google’s competitive edge in the cloud and AI hardware markets.
    • Potential cost reductions and technological advancements may influence pricing and performance in the broader AI chip market.

Conclusion

  • Google’s strategic move highlights the growing importance of AI chips in driving innovation across industries. The collaboration with MediaTek underscores the company’s focus on maintaining a leading position in the AI landscape while adapting to evolving market dynamics and competitive pressures.