ChatGPT-maker OpenAI denied reports by some media outlets about its plans to use Alphabet-owned (GOOGL) Google’s in-house artificial intelligence (AI) chips to power its products. The reports stated that OpenAI was moving beyond Nvidia’s (NVDA) GPUs (graphics processing units) and renting rival Google’s Tensor Processing Units (TPUs) to meet its growing computing needs.
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OpenAI Clarifies News on Use of Google’s AI Chips
An OpenAI spokesperson told Reuters that while the AI company is in “early testing” with some of Google’s TPUs, it currently has no plans to deploy them at scale. AI companies often test different chips. However, deploying new hardware at scale could take much longer and would require different architecture and software support.
OpenAI continues to use Nvidia’s GPUs and Advanced Micro Devices’ (AMD) AI chips to power its offerings. The Sam Altman-led company is also developing its own chip and is on track to meet the “tape-out” milestone this year, which refers to a stage where the chip’s design is finalized and sent for manufacturing. Meanwhile, most of the computing power used by OpenAI is from GPU servers powered by the “neocloud company” CoreWeave (CRWV). In early June, Reuters reported that OpenAI has signed up for Google Cloud service to address the rising need for computing capacity.
Interestingly, Brian Nowak, a 5-star analyst from Morgan Stanley, had reacted positively to the news of OpenAI’s plan to use Google’s TPUs, saying that the move would be a major endorsement of Google’s hardware capabilities. Google’s TPUs, which were previously intended for internal use only, are now being used by iPhone maker Apple (AAPL) as well as AI startups and OpenAI rivals Anthropic and Safe Superintelligence.
Is GOOGL Stock a Buy, Hold, or Sell?
With 30 Buys and nine Holds, Wall Street has a Strong Buy consensus rating on Alphabet stock. The average GOOGL stock price target of $200.06 indicates 12.1% upside potential from current levels. GOOGL stock has declined about 7% year-to-date.
