AI chip landscape shifts: Alphabet's market value approaches the trillion-dollar mark, can TPU challenge NVIDIA's monopoly?

Global AI industry competition is becoming increasingly fierce, and a “chip race” is quietly unfolding among tech giants. Alphabet, with its strong performance, has approached a market capitalization of nearly $4 trillion, becoming a focal point in the capital markets. The core driving force behind this is its self-developed AI chip TPU’s commercialization prospects.

TPU Export: From Cost Center to Profit Engine

For a long time, TPU was only used as an internal chip for Alphabet, mainly supporting its search, recommendation, and other computational tasks. Now, with the explosive growth in global demand for AI computing power, this “feeding the tiger” product line is undergoing a fundamental business transformation. Morgan Stanley’s latest analysis suggests that by 2027, Alphabet could ship 500,000 to 1 million TPU units annually.

This shift has profound significance. Market analysis indicates that every 500,000 TPU units shipped could bring approximately 11% growth to Alphabet’s cloud business revenue, while also boosting earnings per share by about 3%. For a tech giant whose market value is approaching the trillion-dollar level, such incremental growth is not to be underestimated.

Order Signals from Meta

More convincing is the demand feedback from the market. Meta is actively negotiating to purchase AI chips worth billions of dollars from Alphabet. If this large order is finalized, it will not only directly validate TPU’s market competitiveness but also pose a substantial impact on NVIDIA’s market share in the AI acceleration card field.

Technological Moats and Software Ecosystem

The reason TPU can become a “dark horse” lies in Alphabet’s years of R&D accumulation and software optimization capabilities. Compared to NVIDIA’s emphasis on versatility and technological leadership, Alphabet has formed a unique advantage in customizing for specific workloads. Its complete software ecosystem further enhances system adaptability. These factors together lay a solid foundation for large-scale commercial use of TPU.

Subtle Changes in Market Landscape

Although NVIDIA still dominates the AI chip market with over 90% market share and once reached a market value of $5 trillion, its monopolistic position is facing unprecedented challenges. The self-developed chip strategies of tech giants like Alphabet are reshaping the entire industry competition landscape.

Looking at stock performance, Alphabet has increased by over 70% this year, far surpassing NVIDIA’s recent 11% correction. Market funds are accelerating their tilt toward Alphabet, which holds advantages in “model + chip” synergy and has higher growth potential. The successful launch of large models like Gemini 3, along with the continued fermentation of TPU export themes, collectively drive this trend.

Key Future Arena

Whether Alphabet can successfully carve out a share of the AI chip market through its TPU export strategy will directly determine its competitive position in the AI era. As global computing power demand continues to rise and capital expenditure expands, the dual engines of cloud services and AI hardware are expected to help Alphabet achieve higher market valuation. The evolution of this situation will be the most noteworthy variable in the next phase of the global AI industry landscape reshaping.