Omdia: Demand for Google's TPU chips accelerates challenging NVIDIA's dominance

Google's Tensor Processing Unit (TPU) AI chips are experiencing rapid growth in demand, potentially challenging NVIDIA's GPU market dominance.

Rhea-AI Summary

Google's Tensor Processing Unit (TPU) AI chips are experiencing rapid growth in demand, potentially challenging NVIDIA's GPU market dominance. According to Omdia's research, based on Broadcom's Semiconductor Solutions division data, Google's TPU purchases could range between $6 billion to $9 billion this year. Broadcom, which serves as a custom chip outsourcing partner for Google, Meta, and other AI players, has revised its AI semiconductor revenue target to $12 billion for the year.

The growth in TPU shipments appears significant enough to potentially reduce NVIDIA's market share for the first time. Google Cloud Platform's increasing revenue share and improving profitability might indicate that TPU-accelerated instances and AI products are driving this growth, particularly given that accelerator instance types are high-margin products.

Positive

• TPU shipments estimated at $6-9 billion, indicating strong market penetration
• Google Cloud Platform showing revenue growth and improved profitability
• High-margin TPU-accelerated instance types driving cloud business growth

Negative

• None.

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LONDON, Dec. 18, 2024 /PRNewswire/ -- Omdia's latest research highlights the rapid growth in demand for Google's Tensor Processing Unit (TPU) AI chips, a trend that may be strong enough to start chipping away at NVIDIA's market dominance in GPUs. 3Q results from Broadcom, whose Semiconductor Solutions division acts as a custom chip outsourcing partner for Google, Meta, and several other AI players, give our analysts some insight into purchasing trends and information that is typically kept under wraps – how many custom processors is Google buying?

Broadcom's CEO Hock Tan has repeatedly revised up his target for AI semiconductor revenue, aiming for $12bn for this year. Based on this, it is estimated that Google's TPUs could account for somewhere between $6bn – close to Omdia's existing estimates - and $9bn, depending on the breakdown between compute and networking devices. This figure includes a substantial number of Meta's MTIA chips, with a project for a mysterious third client expected to ramp up in 2025.

Alexander Harrowell, Principal Analyst at Omdia noted: "Even though there is some uncertainty in the exact ratio between compute and networking devices, shipments of TPUs, even at the lower $6bn estimate, are growing at a pace fast enough to take share from NVIDIA for the first time. It's worth noting that Google's Cloud Platform business continues to grow as a share of Google's revenue while improving profitability. This could indicate that TPU-accelerated instance types or AI products running on TPUs are driving the growth at Google Cloud, especially as accelerator instance types are high-margin products."

ABOUT OMDIA
Omdia, part of Informa TechTarget, Inc. (Nasdaq: TTGT), is a technology research and advisory group. Our deep knowledge of tech markets combined with our actionable insights empower organizations to make smart growth decisions.

Contact
Fasiha Khan: fasiha.khan@omdia.com

 

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SOURCE Omdia

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What is the estimated value of Google's TPU chip purchases in 2024?

According to Omdia's research, Google's TPU purchases are estimated to be between $6 billion and $9 billion in 2024, based on Broadcom's semiconductor revenue targets.

How are Google's TPU chips affecting NVIDIA's market dominance?

The rapid growth in TPU shipments is significant enough to potentially reduce NVIDIA's market share for the first time, challenging their GPU market dominance.

What is Broadcom's AI semiconductor revenue target for 2024?

Broadcom's CEO Hock Tan has set an AI semiconductor revenue target of $12 billion for 2024.

How are TPUs contributing to Google Cloud Platform's growth?

TPU-accelerated instance types and AI products running on TPUs are driving growth at Google Cloud Platform, with these high-margin products contributing to improved profitability.