Google is reportedly considering bringing its Tensor Processing Units (TPUs), currently supplied by Broadcom, entirely in-house to save costs. If true, the tech giant would develop its TPUs entirely in-house by 2027.
According to a report from The Information, Google executives have been discussing cutting ties with Broadcom for some time now and manufacturing TPUs entirely in-house by 2027.
The move follows a stalemate between the two companies over pricing after months of talks. The Information cites a source familiar with the situation.
Broadcom supported Google's TPU with key technologies such as fast serializer/deserializer interfaces that enable parallel computation between TPUs, which is important for developing language models.
Broadcom's price hikes make Google think twice
Google reportedly estimates it could save billions of dollars a year by switching to in-house manufacturing. The company began replacing Broadcom with Marvell Technology last year as a supplier of network interface chips that connect servers in Google's data centers.
Google and Marvell plan to roll out the improved networking chip next year. The switch came after Broadcom raised prices for its chips by as much as 30 percent during the global chip shortage in 2021.
Google estimates Broadcom's margin on TPUs at 70 percent. Meanwhile, Broadcom has become the world's second-largest seller of AI chips by revenue, behind Nvidia.
Whether that remains the case depends on Broadcom's pricing strategy: If Broadcom-supplied TPUs cost less than Google's chip development costs, Broadcom is likely to remain a supplier, The Information reports. So the matter is apparently not decided
Google, which is investing heavily in AI development, could save billions of dollars a year by reducing the cost of its chips. In trying to reduce its dependence on Nvidia, Google is following in the footsteps of Amazon and Microsoft, which are also looking to develop more AI chips in-house. Microsoft recently invested in US AI chipmaker d-Matrix.
A Google spokesperson described the company's relationship with Broadcom as "excellent" to The Register. There are no plans to change the existing partnership, the spokesperson said. Broadcom, for what it is worth, is a major customer in the Google Cloud.