Google Takes Its AI Chips to Oracle, and OpenAI Plans to Buy Them

Google will sell its own AI chips through Oracle’s cloud, the first time they will be offered outside Google. On the same day, OpenAI was reported to be planning to buy them. Analysts at TD Cowen think Google’s chip sales could reach $62.5 billion next year. That would turn a tool Google built for itself into a serious rival to Nvidia.

What was announced

The chips are called Tensor Processing Units, or TPUs. They are processors Google designs specifically for training and running AI models, an alternative to the graphics chips (GPUs) that Nvidia sells. Oracle and Google said on Tuesday that TPUs will be available on Oracle Cloud Infrastructure from calendar 2027, “ramping over a multi-year period”. Oracle will supply the power, cooling and networking.

Pricing, capacity and a launch date were not disclosed, Network World notes.

Separately, The Information reported that OpenAI plans to buy TPUs from Google, according to Reuters. No terms were given, and OpenAI declined to comment. OpenAI already rents Google’s chips and is among the largest buyers of Nvidia GPUs. CNBC said it confirmed the plan.

The numbers behind it

Estimates for Google’s chip business vary widely, CNBC reports. TD Cowen models $9.4 billion in TPU sales for the second half of 2026 and $62.5 billion for 2027. Wells Fargo expects about $9 billion in the third quarter alone and $99 billion next year.

Cost is the selling point. Research firm SemiAnalysis estimates that Google’s Ironwood TPU costs about 44% less to own and run than an Nvidia GB200 server, according to CNBC. The trade-off for Google is margin: TD Cowen estimates about 20% operating margin on chip sales, against roughly 35% for Google Cloud overall last quarter.

Google’s biggest chip customer is a rival. Anthropic agreed last October to use up to 1 million TPUs, in a deal worth tens of billions of dollars.

Why it matters

For anyone using AI apps, the price of computing power ends up in subscription fees and free-tier limits. More than one serious chip supplier should put pressure on those costs. The big spenders are not slowing down: Amazon, Microsoft and Alphabet plan to spend as much as $600 billion combined on AI infrastructure this year, Reuters reports, and Meta wants to raise up to $95 billion in new shares to pay for its own build-out.

The plain reading: Google is no longer only using its chips to power Gemini. It is selling them, including to OpenAI and Anthropic, its two closest competitors. Alphabet reports third-quarter results later on Wednesday, the first chance to see how much of that shows up in revenue. Investors following Alphabet, Oracle and Nvidia through the results can compare the numbers in one place with tools such as Kyro, an investing terminal that links brokers to AI models.