Google's TPU Chips Face Cold Reception From Data Center Operators
Major AI data center operators are passing on Google's newly available Tensor Processing Units, signaling that Nvidia's grip on the AI chip market remains firm despite efforts by tech giants to build their own silicon.
Data center operators Nebius, Lambda, and CoreWeave all said they have no immediate plans to adopt Google's 8th-generation TPU chips, which Google began selling externally last year after using them internally for its Gemini AI model.
The resistance reflects a simple market reality: customers want what they already know. Marc Boroditsky, Nebius' chief revenue officer, said 99% of his company's customer demand is for Nvidia GPUs. Nick Robbins, CoreWeave's vice president of corporate development, put it plainly: "If 99% of the market wants GPUs, even if that demand drops to 90%, we'll still focus on GPUs."
Lambda's chief financial officer Chuck Fisher made his company's allegiance even clearer. When asked about TPUs at a recent event, he said: "We have green blood at Lambda"-a reference to Nvidia's signature color and a signal of deep dependency on the GPU maker.
Why Nvidia's Dominance Persists
Nvidia holds multiple advantages that make switching difficult. The company is both a key supplier and major investor in leading U.S. data center operators, creating financial ties that extend beyond simple purchasing relationships. Existing customers are locked in by software compatibility, workforce expertise, and established workflows.
Google and other tech companies continue developing in-house chips to reduce reliance on Nvidia, but the market has yet to shift. Demand in data center operations remains concentrated on GPUs, and operators show little urgency to diversify.
Google's Persistence
Google is not abandoning the effort. In February, the company agreed with a major investment firm to establish a joint venture that would lease TPUs to customers. Google is also discussing financing options with partners to create a special purpose vehicle that would purchase and lease TPUs to clients.
These moves suggest Google believes the market will eventually open to alternatives. For now, though, data center operators see little reason to change course.
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