Key Highlights

  • OpenAI plans to buy Google's AI chips, a report said, with no financial terms or other details disclosed.
  • Amazon, Microsoft and Alphabet plan to spend as much as USD 600 billion combined this year on AI infrastructure.
  • Google began selling its Tensor Processing Units directly to some customers this year as an alternative to Nvidia's chips.
  • Alphabet reports quarterly results Wednesday, with investors watching whether AI investment keeps driving growth in its cloud business.

The Reported Chip Plan

A report on Tuesday, citing a person familiar with the matter, said OpenAI plans to buy AI chips from Alphabet's Google (NASDAQ:GOOGL). The report did not disclose financial terms or other details. Google did not immediately respond to a request for comment outside regular business hours, and OpenAI declined to comment.

The plan, as reported, deepens ties between two companies that compete in AI products and search but have increasingly struck commercial deals.

From Cloud Models to Chips

Last week, OpenAI said it would make its frontier AI models available through Google Cloud. The companies announced on October 21 that those models and the Codex coding agent are coming to Google Cloud's Model Garden, where customers can buy them through Google Cloud Marketplace using existing cloud spending commitments. Selected enterprise customers have private-preview access, with general availability planned in the coming weeks.

OpenAI is already among the largest buyers of graphics processing units from Nvidia (NASDAQ:NVDA), which it uses to train and deploy AI models. A June 2025 report said the ChatGPT maker had begun renting Google's AI chips. An OpenAI spokesperson at the time described its use of Google's chips as early testing, with no plans for large-scale deployment.

TPUs Gain Traction

Google's Tensor Processing Units, or TPUs, have gained traction as an alternative to Nvidia's market-leading AI chips as companies seek cheaper options. Google began selling TPUs directly to some customers this year. Deals with customers including rival Anthropic have fueled demand.

Alphabet's chief financial officer has said the company projects recognizing a small percentage of revenue from TPU sales agreements by the end of this year, with the vast majority recognized in 2027.

Spending Under Scrutiny

Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Alphabet plan to spend as much as USD 600 billion combined this year on AI infrastructure. Investors increasingly question when such spending translates into meaningful returns.

OpenAI unveiled its first custom AI chip in June, designed with Broadcom (NASDAQ:AVGO). It said it planned to deploy the processor by the end of this year as part of a multi-generation chip program.

Alphabet's Results in Focus

Alphabet reports quarterly results after the market closes on Wednesday. Investors are looking for signs that heavy AI investment continues to drive growth in its cloud business.

Markers to Follow

Financial terms and volumes of any chip purchase, comment from Google or OpenAI, Alphabet's cloud and TPU figures, and the rollout of OpenAI models on Google Cloud are the next data points.