Alphabet (GOOGL) and Meta join forces to weaken Nvidia's (NVDA) software dominance

Google (GOOGL), a subsidiary of Alphabet, is collaborating with Meta Platforms (META) on a new initiative aimed at enhancing the performance of its artificial intelligence chips to surpass similar products from Nvidia (NVDA). According to sources familiar with the matter, the goal of this initiative is to make Google’s AI chips perform better when running PyTorch. PyTorch is the world’s most widely used artificial intelligence software framework, is open source, and is strongly supported by Meta Platforms. It is also one of the most commonly used tools for developers building AI models.

Alphabet (GOOGL) has recently attracted attention due to its self-developed Tensor Processing Unit (TPU). Several experts predict that Alphabet’s TPU is likely to become a major driver of its revenue growth and push GOOGL’s stock price higher. These dedicated chips have long been a cornerstone of Google Cloud, and investors are increasingly recognizing that selling them externally could become a profitable extension of this strategy.

A Google Cloud spokesperson declined to comment on the details of the collaboration with Meta. However, a spokesperson confirmed to Reuters that this move will provide customers with more options. The spokesperson stated: “We are seeing tremendous growth in demand for both TPU and GPU infrastructure, and the growth rate is astonishing. Our focus is to provide developers with the flexibility and scalability they need, regardless of which hardware they choose to use.”

Alphabet is well positioned for growth, especially in its AI chip technology, with analysts valuing it as high as $900 billions. In addition, several top Wall Street institutions have recommended buying GOOGL stock and expect its price to reach record highs in the coming months. This could indicate that this Google developer is poised to lead the “Magnificent Seven” list for a second consecutive year.