Alphabet Expands AI Edge With New 'Ironwood' Chip as TPU Demand Soars

This article first appeared on GuruFocus.

Alphabet (GOOGL, Financials) announced plans to roll out its newest artificial intelligence processor, Ironwood, the seventh generation of its Tensor Processing Unit, or TPU. The chip is more than four times faster than its predecessor and optimized for large-scale AI workloads such as model training and chatbot performance.

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Googles TPUs have become a key growth driver for its cloud business, which reported 34% year-over-year revenue growth last quarter to $15.15 billion. CEO Sundar Pichai said demand for AI infrastructure, including TPU-based solutions, has been one of the main catalysts behind the surge.

The companys decade-long investment in custom silicon has turned into a strategic advantage as rivals Amazon and Microsoft race to develop competing AI chips. Analysts at Bernstein said Google remains the only major cloud provider deploying application-specific chips at scale, while D.A. Davidson estimated the TPU and DeepMind units could be worth up to $900 billion combined.

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