The tech giant Alphabet has apparently confidentially turned to Intel as a backup chip manufacturer in order to be able to meet the high demand.
• Alphabet is said to have placed an order with Intel for more than 3 million AI chips
• NVIDIA also with similar considerations
• Major order would be an important milestone for Intel’s foundry business
As the US technology media “The Information” reports, citing people familiar with the matter, after months of technical tests, Google’s parent company Alphabet has commissioned Intel to produce more than three million special AI chips for 2028. These are said to be so-called Tensor Processing Units (TPUs) – processors specially developed by Google that are optimized for training and operating large AI models. Reuters also confirmed that several industry sources point to closer cooperation between Alphabet and Intel.
Industry observers see a possible Alphabet order as much more than an ordinary production contract: If Intel actually produces several million AI chips for Google, this would be a significant vote of confidence in the technological progress of the group, which has been investing billions of euros for years in setting up its own foundry business, which is intended to supply external customers with the most modern manufacturing technologies.
Intel is fighting to return to the top
The news comes at a crucial time for Intel. The group has lost market share in recent years and has suffered setbacks, particularly in modern manufacturing processes. At the same time, the company is investing heavily in new production sites and advanced manufacturing technologies in order to catch up with the leading players in the industry.
The strategy of Intel boss Lip-Bu Tan, who has been at the helm of the company since 2025, relies heavily on expanding contract manufacturing. The goal is to attract external customers and establish Intel as an independent production partner for the entire technology industry. Large orders from companies like Alphabet could help ensure new factories are running at capacity and boost market confidence in the foundry offensive.
AI companies rely on risk diversification
In addition to the technological aspects, the geopolitical dimension also plays an important role. The concentration of much of the world’s top chip production in Taiwan has been seen for years as a potential risk to global supply chains. Many companies are therefore trying to reduce their dependence on individual production locations. Collaborating with Intel would give Alphabet additional production options and increase security of supply for future AI generations. According to “The Information”, NVIDIA is also said to have similar considerations. The market leader for AI accelerators should also consider using Intel as a complementary manufacturing partner in order to be able to respond more flexibly to the rapidly increasing demand in the long term.
Signaling effect for the entire industry
Even though neither Alphabet nor Intel have officially confirmed the reports yet, the news is already attracting attention on the financial markets. Investors see possible orders of this size as an indication that Intel’s billion-dollar investments in modern manufacturing technologies could begin to bear fruit. Accordingly, Intel shares took off on the NASDAQ on Monday and ultimately gained 11.19 percent to $110.27.
If the reports prove true, this would not only be an important success for Intel, but also a sign of the beginning of a reorganization of the global semiconductor industry. The race for dominance in the AI age is no longer decided solely by the development of powerful chips. Equally crucial is the question of who is able to produce these chips in sufficient numbers and using the most modern technology.
Carolin Ludwig, editorial team at finanzen.net
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