Thomas Kurian, Google Cloud chief executive officer (CEO), said the company's artificial intelligence (AI) accelerator business is more than twice the size of rival hyperscalers Microsoft (MS) and Amazon Web Services (AWS).
According to the U.S. investment outlet Investor's Business Daily (IBD), Kurian said on the 8th (local time) at a conference hosted by the investment bank (IB) Goldman Sachs, "Google Cloud's AI accelerator business, namely the Tensor Processing Unit (TPU) business, is more than twice as large as the next biggest hyperscaler." IBD interpreted this as a remark with Amazon's custom AI chip "Trainium" and MS's "Maia" in mind.
The TPU is an AI chip Google designed in 2015 to counter Nvidia's graphics processing unit (GPU), and it is equipped with high-bandwidth memory (HBM). The 8th-generation TPU unveiled in May this year was released as the training "TPU 8t" and the inference "TPU 8i."
Originally, Google used TPUs only for its core services and cloud, but starting this year it began selling TPUs to external corporations such as Anthropic and Meta. Market experts analyze that, based on AI chip sales to external customers, Amazon is ahead of MS, and if Kurian's remarks are correct, Google's external TPU sales are estimated to be more than twice those of Amazon.
Kurian explained that Google is expanding the TPU business in three main ways. It is monetizing TPUs through a rental model in which corporations lease TPU compute resources on Google Cloud, direct sales that allow installation in customer data centers such as Anthropic, and sales via a joint venture established with Blackstone.
He added that the number of large contracts exceeding $100 million (about 130 billion won) is doubling on both a quarterly and annual basis.
Earlier, Alphabet, Google's parent company, announced in its second-quarter earnings that cloud revenue rose 82% year over year to $24.77 billion (33 trillion won). Starting in the second quarter, Google included external TPU sales in cloud revenue and projected that most of the related revenue will be realized next year.
Morgan Stanley estimated in a report released last month that Google Cloud's first-party (direct sales) TPU revenue will reach $84 billion (113 trillion won) next year and $108 billion (145 trillion won) in 2028. First-party sales refer to external direct sales rather than TPU lending through the cloud.
Brian Nowak, a Morgan Stanley analyst, said, "We expect the power capacity of the TPU systems Google will sell to reach 0.3 gigawatts (GW) in the second half of this year, 3.2 GW in 2027, and 4.2 GW in 2028."