Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) has a new growth trick up its sleeve.
There have been rumors surrounding this new business for a long time, but they were finally confirmed in the first quarter of this year: Alphabet is directly selling some of its Tensor Processing Units (TPUs) to select clients
As a result, the growth rate of its cloud business skyrocketed. Investors won’t want to overlook this new investment angle to Alphabet’s stock, as it could make the company one of the best investment opportunities in the artificial intelligence (AI) space. TPUs offer superior cost advantages to GPU-based training GPUs (graphics processing units) are still the primary hardware deployed to train and run AI models.
Demand for them is why Nvidia (NASDAQ: NVDA) has become the largest company in the world, but Alphabet may be on course to capture that crown. Alphabet (in collaboration with Broadcom) developed the TPU, an application-specific integrated circuit designed precisely to handle AI and machine learning workloads. In those applications, TPUs can outperform GPUs from a cost perspective.