OpenAI Plans to Purchase Google’s AI Chips Amid Rising Infrastructure Spending

OpenAI plans to buy Google’s AI chips, according to a report citing a person familiar with the matter. This development highlights the ongoing efforts by technology companies to ramp up spending in order to meet the surging demand for AI computing infrastructure.

The reported plan deepens the commercial ties between OpenAI and Alphabet’s Google. While the two companies compete directly in search and AI products, they have increasingly engaged in commercial partnerships. Recently, OpenAI announced that it would make its frontier AI models available through Google Cloud.

Neither financial terms nor other operational details were disclosed in the report. Google did not immediately respond to requests for comment outside regular business hours, and OpenAI declined to comment on the matter.

This hardware strategy comes at a time when major technology firms are heavily investing in AI infrastructure. Amazon, Microsoft, and Google parent Alphabet plan to spend a combined total of up to $600 billion this year on AI infrastructure, as investors increasingly question when such massive capital expenditures will translate into meaningful returns.

OpenAI is already one of the largest buyers of Nvidia’s graphics processing units, which it relies on to train and deploy its AI models. However, the ChatGPT maker began renting Google’s AI chips, as reported previously. Google’s Tensor Processing Units have gained traction as a cost-effective alternative to Nvidia’s market-leading hardware as companies seek cheaper options. Google began selling TPUs directly to some select customers this year.

Demand for Google’s TPUs has also been fueled by deals with other customers, including rival Anthropic. Alphabet CFO Anat Ashkenazi previously stated that the company expects to begin recognizing a small percentage of revenue from TPU sales agreements by the end of this year, with the vast majority expected to be recognized in 2027.

In addition to relying on external hardware suppliers, OpenAI is pursuing its own semiconductor solutions. In June, the company unveiled its first custom AI chip designed in partnership with Broadcom. OpenAI stated at the time that it planned to deploy this processor by the end of this year as part of a multi-generation chip program.

"This development highlights the complex nature of competition and collaboration in the artificial intelligence sector. Even as companies compete in products and search, rising infrastructure costs and supply chain diversification are driving major players like OpenAI to source hardware across multiple providers, including Google and Nvidia, while also developing custom silicon. For the broader industry, managing capital expenditure and securing reliable computing power remain critical business priorities as return on investment timelines face closer scrutiny from investors." — Dr. Shishir Gupta, Founder & CEO, StartupLanes