Alphabet cloud revenue surges as TPU chip sales begin

Alphabet reported strong second-quarter results, driven largely by its cloud business. Google Cloud sales reached $24.8 billion, representing an 82% increase compared to the previous year and an acceleration from the 63% growth recorded in the prior quarter.

A significant development involves Alphabet's Tensor Processing Units (TPUs), which are custom AI chips designed for specific workloads. CEO Sundar Pichai indicated that the company has begun selling these TPUs to select external customers, a move that generates new revenue and positions Alphabet as a direct competitor to Nvidia.

The company maintains a long-term partnership with Broadcom through 2031 to assist in TPU design, suggesting that increased TPU sales could benefit Broadcom's business as well.