Alphabet to Start Shipping TPUs to External Customers by Year-End

Alphabet is poised to become an external chip and compute seller as it begins shipping Tensor Processing Units (TPUs) to customers by year-end. The move marks a significant shift in the company's strategy, where its in-house AI silicon was previously used internally. This change is driven by the growing demand for cloud computing and AI processing power.

The company has a $460 billion Cloud backlog and has reported a 63% growth in Google Cloud revenue to $20.03 billion in Q1 2026. Alphabet's operating margin expanded to 33%, with revenue from products built on its GenAI models growing nearly 800% year over year.

Alphabet raised its 2026 CapEx guidance to $180 billion to $190 billion, up from $175 billion to $185 billion, after the Intersect acquisition. The company's quarterly dividend was also raised by 5% to $0.22 per share.