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Nvidia's AI Moat Eroded by Google's TPUs
11 Dec
Summary
- Google's TPUv7 powers major AI models like Gemini 3 and Claude 4.5 Opus.
- TPUs offer significant cost savings over Nvidia GPUs, up to 30% for external clients.
- Google now sells TPUs directly, challenging Nvidia's long-standing market dominance.
For over a decade, Nvidia's GPUs have been the backbone of AI development, creating a strong market position aided by its CUDA software ecosystem. However, Google's Tensor Processing Units (TPUs), particularly the new TPUv7, are now directly challenging this dominance. These specialized chips have powered leading AI models such as Google's Gemini 3 and Anthropic's Claude 4.5 Opus, signaling a viable alternative to the GPU-centric approach for large-scale AI training.
The economic implications are significant, with TPUv7 offering superior throughput-per-dollar and an estimated 30% cost reduction compared to Nvidia's hardware. Google's recent pivot to selling TPUs directly to external customers, moving beyond its cloud-only model, further intensifies this competition. A landmark deal with Anthropic for up to 1 million TPUv7 chips underscores this strategic shift.
