OpenAI is reportedly renting Alphabet-owned (GOOGL) Google’s artificial intelligence (AI) chips to power ChatGPT and its other offerings, according to The Information and Reuters. Interestingly, OpenAI’s decision to rent Google’s in-house tensor processing units (TPUs) marks the first notable shift for the Sam Altman-led company from Nvidia’s (NVDA) GPUs (graphics processing units).
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OpenAI Reduces Reliance on Nvidia’s GPUs
OpenAI has previously sourced Nvidia chips mainly through its partnerships with Microsoft (MSFT) and Oracle (ORCL) to train and deploy its AI models. Renting Google’s TPUs is part of OpenAI’s broader strategy to reduce its reliance on Microsoft-managed infrastructure/data centers and Nvidia’s GPUs. It is worth noting that OpenAI is one of the largest buyers of Nvidia’s GPUs, leveraging the chip giant’s AI chips to train models and also for inference computing.
OpenAI expects the TPUs, which are rented through Google Cloud, to lower the cost of inference, presenting a cheaper alternative to Nvidia’s GPUs. Earlier this month, Reuters reported that OpenAI plans to use the Google Cloud service, given its growing need for higher computing capacity.
The collaboration between OpenAI and Google reflects the changing dynamics between the two competitors in the AI space. While Google is offering its TPUs to OpenAI, a Google Cloud employee told The Information that the search engine giant is still not renting its most powerful version of its AI chips to OpenAI. For Google, the deal marks a further expansion of the external availability of its TPUs, which were previously intended for internal use only. Google’s TPUs are now being used by iPhone maker Apple (AAPL) and AI startups Anthropic and Safe Superintelligence.
Is GOOGL Stock a Good Buy?
With 30 Buys and nine Holds, Alphabet stock scores a Strong Buy consensus rating on TipRanks. The average GOOGL stock price target of $200.06 implies 12.1% upside potential. GOOGL stock is down about 6% year-to-date.
