Shares of Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) were moving higher today after the tech giant introduced two new chips, bringing it into closer competition with Nvidia and expanding its ambitions in the fast-growing semiconductor market.
The stock was up 1.2% on the news after trading up as much as 4% earlier in the session, as tech stocks gained broadly, rebounding from last week’s sell-off.
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Google steps up its chip game
On Monday, Google announced two new versions of its eighth generation of tensor processing unit (TPU) chips, the TPU 8tx and the TPU 8i Max. The chips improved on earlier eighth-generation versions designed for AI training and inference. The TPU 8i Max is designed to overcome the memory wall, or the challenge of efficiently using memory, which is a computing challenge beyond the current memory shortage.
The TPU 8tx, on the other hand, is optimized for secure and confidential inference, and is paired with the AMD EPYC CPU.
Google is hoping to make the TPU more competitive with Nvidia’s AI chips, as the company said in the announcement, “Our aim is to make TPUs more easily accessible to every developer and Cloud customer.”
Why investors should watch Google’s chip business
Alphabet shares tumbled after its recent third-quarter earnings report, as investors were spooked by slowing revenue growth in the search business. The good news is the company is capitalizing on the growth in AI through Google Cloud, but the company also has a significant opportunity with its chips business, including TPUs.
AI chips have become a huge and fast-growing market, and it’s a significant opportunity for Alphabet. Keep an eye on its TPU development and growth, as this seems to be an underrated opportunity for the tech giant.
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