A new report from The Information said Google is in deep talks with Meta Platforms to supply Meta with Google’s custom AI chips, and the news created an immediate reaction across markets as Nvidia traders watched their positions turn red.

The report said Meta is preparing to spend billions to use Google’s tensor processing units, or TPUs, inside Meta’s data centers in 2027. The same report said Meta may also start renting TPUs from Google Cloud next year.

Alphabet, Google’s parent company, jumped 2.7% in late trading, while Nvidia dropped 2.7%, showing how fast investors reacted to the idea of Meta shifting part of its AI hardware stack.

The Information said one unnamed person familiar with the talks described Meta’s plan to test TPUs for long-term use. Meta is one of the world’s heaviest spenders on AI infrastructure, so any change in Meta’s chip choices matters far beyond the company itself.

Google expands TPU deals as Meta evaluates the hardware

Google developed TPUs more than ten years ago for its internal AI work.They are ASIC chips designed for a single job: running and training AI models.

While Nvidia’s GPUs were originally made for video game graphics and later adopted for AI because they handle huge amounts of data, TPUs were built only for AI tasks. This is one reason Meta is testing them now, as the company looks for more options in a market where Nvidia still controls most of the demand.

Google already signed a deal to supply up to 1 million TPUs to Anthropic, and that announcement got attention on Wall Street.

Jay Goldberg, an analyst at Seaport, called the Anthropic deal “a really powerful validation” and added, “A lot of people were already thinking about it, and a lot more people are probably thinking about it now.”

The Meta talks increased that attention, especially since Meta spends more on data centers than most companies in the world.

Asian markets reacted fast.In South Korea, IsuPetasys, which supplies multilayered boards to Alphabet, surged 18% to an intraday record.

In Taiwan, MediaTek gained almost 5% as traders priced in potential demand growth linked to Google’s chip ecosystem. Investors in Asia were responding to the idea that Google may expand its hardware partnerships well beyond its own products.

TPUs were built into Google’s internal systems, including AI models developed by Google and DeepMind.

Engineers who work on Google’s Gemini models share what they learn with Google’s chip designers, which helps shape new versions of TPUs. That feedback loop also gives AI teams the ability to customize hardware for their own workloads, something that Meta is now studying.

The developments around Google and Meta came as Nvidia was dealing with another story. Michael Burry, the investor known for his 2008 housing-market bet, criticized Nvidia’s stock-based compensation and buybacks last week in a post on X.

Nvidia responded by sending a memo to Wall Street analysts to address his claims, something reported by Barron’s.

Burry did not change his mind. In a new post on Monday, he said he stands by everything he wrote. Burry said he plans to share more comments on his timeline and directed people to a post on his Substack.

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