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Google's AI Chip Surge: Billions in New Revenue Ahead
2 Dec, 2025
Summary
- Morgan Stanley predicts improved TPU availability for Google.
- TPU production could reach 7 million units by 2028.
- Half a million additional TPUs could yield $13 billion revenue.
Morgan Stanley's semiconductor team indicates that Alphabet's Tensor Processing Units (TPUs) are seeing improved availability, paving the way for accelerated commercial strategies. Projections now suggest production could reach 7 million units by 2028, a substantial increase from previous estimates. This enhanced manufacturing scale points to broader commercial ambitions beyond internal use.
The firm estimates that selling an additional 500,000 TPUs could unlock approximately $13 billion in revenue and boost Alphabet's earnings per share. This revenue stream is partly driven by opportunities to sell these high-performance chips directly to third-party data center operators.
While a significant portion of the increased production will support Google's own AI workloads and cloud demand, the overall ramp-up signals a strong enterprise demand for compute power to train and deploy AI models. This positive outlook also influenced Morgan Stanley's upgrade of MediaTek due to broader AI ASIC supply chain strength.
