# Google shifts AI workloads to TPUs, cutting Nvidia dependency

Digest AI · Hardware & Compute · published 2026-10-01T16:45:00Z

Canonical: https://digestai.news/story/google-shifts-ai-workloads-to-tpus-cutting-nvidia-dependency

## Summary

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.

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.

## 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

## Why it matters

Google’s TPU push could reshape AI hardware markets if it scales, but Nvidia’s supply constraints and hyperscaler dominance delay disruption. Margins and backlogs will reveal the shift’s real cost.

## Sources

1. [How Serious Is Alphabet’s Threat to Nvidia?](https://247wallst.com/investing/2026/10/02/how-serious-is-alphabets-threat-to-nvidia) (247wallst.com, 2026-10-01)

Part of the developing story: [The AI Chip Wars and Market Shifts](https://digestai.news/thread/nvidia-ceo-says-company-will-double-chip-sales-next-year) (4 stories)

## Cite

Digest AI, "Google shifts AI workloads to TPUs, cutting Nvidia dependency", 1 October 2026, https://digestai.news/story/google-shifts-ai-workloads-to-tpus-cutting-nvidia-dependency

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