Google shifts AI workloads to TPUs, cutting Nvidia dependency
Alphabet’s Google Cloud revenue grew 82% in the summer quarter, driven by AI infrastructure powered by its own TPUs. Meanwhile, Nvidia’s data center revenue surged 105.8%, fueled by demand from hyperscalers—including Google, which still buys Nvidia systems but is increasingly routing AI workloads to cheaper, application-specific TPUs.
Key points
- Google Cloud revenue grew **82%** in summer quarter, driven by TPU-powered AI infrastructure
- Nvidia’s data center revenue rose **105.8%**, with **$89.02B** from data centers alone
- Google routes **22B API tokens/minute** through Gemini, reducing Nvidia dependency but margins may show TPU impact first
Google’s Gemini model processes 22 billion API tokens per minute, and the company’s full-stack AI approach—controlling models, cloud, and hardware—reduces reliance on Nvidia. However, Nvidia’s gross margin (expected to hit 71–72% in Q4) and backlog of $460 billion in Google Cloud orders suggest the shift may take years to materialize. Analysts note Nvidia’s supply constraints could delay Google’s TPU adoption, limiting immediate impact on Nvidia’s revenue.
Model page: Gemini 4 Argon →
The story so far
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How Serious Is Alphabet’s Threat to Nvidia?
247wallst.com · 1 October 2026
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