Google Picks Intel as Backup TPU Manufacturer, Boosts Foundry Business
In Focus
- Google has reportedly ordered three million TPU units from Intel
- Nvidia is evaluating Intel’s advanced 18A technology for possible use in chip production
- Intel stock surged more than 9% on June 8 on news of Google AI chips order
Google has settled on Intel as the backup chip manufacturer for its in-house Tensor Processing Units (TPUs) in 2028. The search giant has reportedly submitted an order for three million units of the AI chips from Intel. Nvidia is evaluating Intel’s advanced 18A process technology to see whether it can be used to manufacture processors that combine four graphics chips into a single unit.
What Does the Google TPU Order Mean for Intel?
Google’s potential order could support Intel’s foundry business significantly. The news comes at a time when the chip maker is working to reclaim its leadership in chipmaking after losing to TSMC following years of management errors.
The U.S. government has bought an equity stake in the company. Last year, Nvidia reportedly purchased a $5 billion stake in the company. The share purchase was considered one of the most significant cross-investment deals in the global semiconductor sector.
Rising demand for AI chips has strained TSMC’s capacity to meet supply, causing major AI processor design companies to shift to Intel. The decision by Google and Nvidia to consider Intel shows that the largest players in the AI industry are looking to diversify the supply chain, which has been largely concentrated in TSMC.
Last year, Nvidia started testing Intel’s 18A process technology in manufacturing advanced chips. The technology packs more transistors in chips, enabling them to handle more data while consuming less power. But Nvidia halted 18A process technology trials in December 2025 and decided not to use it in chip production.
Impact of Google’s AI Chip Order on Intel Stock
News about Google and Nvidia’s plan to manufacture chips in the U.S. pushed Intel stocks up by more than 9% on June 8. The chipmaker is on the path to recording close to 169% gain this year, an indication of progress in the turnaround strategy implemented by CEO Lip-Bu Tan.
Intel has signed major partnership deals since Tan took over leadership in the company. Earlier this year, the U.S. chip manufacturer partnered with Elon Musk’s Terafab AI chip project. The new partnership will see Intel produce processors required to power Musk’s data center and robotics ambitions. President Donald Trump’s administration has also supported Intel’s chip business as part of promoting domestic manufacturing.
“Beyond the standard need to diversify, Google and Nvidia are even more motivated than usual to work with Intel. Supporting Intel supports U.S.-based manufacturing, which is important for the relationship with the U.S. administration,” Gil Luria Analyst D.A. Davidson noted as cited by Reuters.
What Other Deals is Intel Negotiating?
Intel is reportedly discussing a chip production deal with Apple. While talks are still at preliminary stages, the deal could see the chip maker produce some processors for Apple devices.
Google has been working to make its custom AI chips an alternative for Nvidia’s dominant GPUs. Alphabet investors remain optimistic that the chips will drive future growth, with analysts placing the revenue opportunity at $900 billion. Should TPUs gain traction, Intel could expand its partnership with the tech giant significantly.
