Google and AMD Teaming Up on Next-Gen AI Chip Development

Google is reportedly partnering with AMD to develop its next-generation Tensor Processing Unit (TPU). If true, this collaboration could trigger a major upheaval in the semiconductor industry. According to Wedbush Securities analyst Matt Bryson, Google choosing to partner with AMD over other companies like Broadcom or Intel would be 'a development worth watching'. The partnership is expected to leverage AMD's design for its tenth-generation TPU, capitalizing on its expertise in CPUs and technological strengths in packaging and networking.

Google unveiled two eighth-generation TPUs earlier this year, the TPU v8t for AI model training and the TPU v8i for inference workloads. However, with growing demand for reinforcement learning in inference tasks and agent-based AI, some analysts speculate that Google may be planning to develop a tenth-generation TPU specifically optimized for these workloads.

Ahead of the US market open on Tuesday, Google shares fell nearly 1%, while AMD's stock dropped more than 3%.