Google Shares Gain on Report of Chip to Boost AI Efficiency

The Google Gemini app.

Shares of Google owner Alphabet Inc. gained on a report that the company is developing a server chip designed to optimize its Gemini artificial intelligence model.

The semiconductor, called Frozen v2, may be deployed as soon as 2028, the Information reported Monday, citing unnamed people familiar with the matter. The chip is separate from Google’s tensor processing units, or TPUs, and would reduce the amount of data the chip has to move around, making it faster at responding to queries, the Information said.

Alphabet shares rose as much as 3.7% to $359.68 in New York. Google didn’t immediately respond to a request for comment.

Virtually every major AI developer is said to be developing its own chip in an effort to gain an edge by tailoring hardware that’ll work most efficiently with their systems. Just last month, OpenAI unveiled its first custom chip developed in partnership with Broadcom Inc. Amazon.com Inc. is in talks to sell custom chips for use in other companies’ data centers. Alphabet has seen significant demand for its TPUs.

Anthropic PBC is also in early talks about producing a chip with Samsung Electronics Co., the Information reported earlier this month.

Read More: OpenAI, Broadcom Unveil Chip to Run Models Faster, Cheaper

While Google has a spotty history with consumer hardware products, the company has proved willing to direct resources to computing equipment over the years. The firm first created the TPU for internal use to improve its search service, the cash cow.

Google has since tailored its silicon for the cloud-computing business and for use in multi-purpose Gemini AI models. In April, Chief Executive Officer Sundar Pichai said Google was preparing to deliver TPUs to a “ select group of customers” for their own data centers, presenting a potential challenge to Nvidia Corp.