Nvidia Corp's (NASDAQ:NVDA) biggest cloud allies are suddenly entertaining a new suitor – and it's Alphabet Inc‘s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google. The tech giant has quietly inked a deal with London-based Fluidstack, a cloud provider known for filling racks with Nvidia's most in-demand GPUs, to host its homegrown Tensor Processing Units (TPUs) in a New York data center.
The move signals a calculated bid to muscle in on Nvidia's turf and seed adoption of Google's chips beyond its own cloud empire.
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For investors, this is a rare peek at Alphabet's aggressive ambitions in AI infrastructure. Until now, Google Cloud was the primary gateway for renting TPUs, with tech players like Apple Inc. (NASDAQ:AAPL), Midjourney, and even OpenAI briefly kicking the tires earlier this year.
By convincing Fluidstack – a startup Nvidia has championed – to house its hardware, Google is striking at the heart of Nvidia's GPU rental network, reported The Information. It's sweetening the deal too, offering a $3.2 billion backstop to ensure Fluidstack's New York build-out stays afloat, effectively buying market entry one data center at a time.
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Alphabet's Offensive
This marks Google's first foray into planting TPUs in third-party data centers, a bold step toward hardware independence. The stakes are high: Nvidia's market dominance has made AI compute notoriously expensive, and hyperscalers like Google, Amazon.com Inc (NASDAQ:AMZN), and Meta Platforms Inc (NASDAQ:META) have all started designing custom chips to break that stranglehold.
Alphabet's financial lifeline for Fluidstack signals a willingness to underwrite an entire ecosystem to see its chips succeed – potentially making GPU-only racks a relic of AI's first wave.
Nvidia's Calm, For Now
Nvidia CEO Jensen Huang has downplayed competition, arguing that developers prefer GPUs for their versatility and mature software stack. But Google's approach – turning Nvidia's own partners into TPU hosts – underscores just how serious the AI chip wars are getting.
With Crusoe and CoreWeave Inc (NASDAQ:CRWV) also in talks with Google, Wall Street may need to start pricing in a future where Nvidia shares its dominance with its biggest customer-turned-competitor.
For now, Nvidia remains the AI kingpin. But Alphabet's strategy is clear: if you can't beat them, fund their friends – and then fill their racks.
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