This article first appeared on GuruFocus.
Google parent Alphabet (GOOGL, Financials) has reportedly selected Intel as a manufacturing partner for more than 3 million tensor processing units (TPUs) scheduled for production in 2028, according to a report from The Information citing people familiar with the discussions.
The reported order would represent a significant win for Intel’s contract manufacturing business as the company works to rebuild its position in advanced semiconductor production. Intel shares rose more than 9% following the report, extending gains that have already pushed the stock sharply higher this year.
The report also said Nvidia is evaluating Intel’s manufacturing technology for a future processor design, although no order has been placed.
The potential deal highlights growing efforts by major AI companies to diversify supply chains that remain heavily dependent on Taiwan Semiconductor Manufacturing Co. Rising demand for AI chips has strained industry capacity, encouraging technology companies to seek additional manufacturing partners.
For Google, expanding production of its in-house TPUs could support its strategy of reducing reliance on Nvidia’s graphics processors while strengthening the competitiveness of its cloud business.
Investors will be watching for official confirmation from the companies and further updates on Intel’s foundry customer pipeline.
