Key Highlights
- Meta Platforms has secured a multi-year, multi-billion-dollar partnership with Google for leasing Tensor Processing Units (TPUs) to power AI initiatives.
- The tech giant is in discussions to purchase Google TPUs outright for integration into its own data center infrastructure starting in 2026.
- This Google agreement follows Meta’s announcement earlier this week of substantial long-term chip deals with Nvidia and AMD.
- Meta’s Nvidia partnership involves millions of next-generation Blackwell and Rubin GPU chips, while the AMD agreement is valued at roughly $100 billion over five years.
- Analysts on Wall Street assign META stock a Strong Buy consensus rating, with an average price objective of $864.62āindicating approximately 31.6% potential appreciation.
Meta Platforms has capped off an extraordinary week in the chip sector by securing substantial AI computing agreements with three industry heavyweights: Nvidia, AMD, and now Google.
The latest deal centers on Meta leasing Google’s proprietary Tensor Processing Units (TPUs), chips purpose-built for machine learning tasks. The Information first reported this multi-year arrangement, which involves billions of dollars in financial commitments.
Meta isn’t stopping at cloud leasingāthe company is actively negotiating to buy Google TPUs directly for installation in its proprietary data centers, with potential rollout beginning next year.
Created by Google’s parent company, Alphabet, TPUs serve as a competitive alternative to Nvidia’s market-leading GPU products. These processors have become an increasingly valuable revenue source for Google Cloud, and landing Meta as a client gives Alphabet a high-profile customer win.
Alphabet has also formed a partnership with an undisclosed institutional investor specifically focused on TPU leasing operationsāsignaling the company’s determination to grow its chip business beyond internal use cases.
Meta’s Unprecedented Chip Spending Spree
Earlier this week, Meta announced an AMD collaboration spanning 6 gigawatts of computing power. Industry experts value this five-year arrangement at approximately $100 billion.
The AMD agreement positions Meta as the first customer for specially designed MI450 GPUs and Venice CPU processors, scheduled for delivery in late 2026. The deal also grants Meta warrants to purchase up to 160 million AMD shares, establishing shared financial interests between both companies.
The Nvidia arrangement matches this ambitious scope. Meta plans to deploy millions of Nvidia’s upcoming Blackwell and Rubin GPU chips, accompanied by Grace and Vera central processing units, along with Spectrum-X networking technology. This marks Nvidia’s first major standalone Grace CPU deployment with any customer.
Together, these three strategic partnerships reflect Meta’s substantial capital investment approach designed to close the competitive divide in artificial intelligence technology.
Google Seeks to Erode Nvidia’s AI Chip Dominance
For Google, attracting Meta as a TPU customer marks an important victory in its effort to contest Nvidia’s commanding position in the AI accelerator marketplace.
Nvidia stock tumbled more than 5% after the news broke, while AMD dropped over 3%. Alphabet shares fell roughly 1.76%. Meta, by contrast, rose 0.51%.
Earlier reports this week indicated Google has been aggressively working to expand TPU adoption, with several emerging companies already signed on. However, the company has faced manufacturing bottlenecks and limited enthusiasm from major cloud providers.
Meta’s involvement gives Google a chance to demonstrate TPU capabilities at enterprise scale on demanding AI workloads.
Alphabet’s collaborative venture with an undisclosed institutional partner is designed to support TPU leasing activitiesāa structure that could supply the funding needed to scale production capacity as demand increases.
From a financial standpoint, META holds a Strong Buy consensus rating on TipRanks, backed by 39 Buy recommendations versus 4 Hold ratings. The consensus price objective of $864.62 implies roughly 31.6% upside potential from current price levels.
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