Google’s parent company has contracted with Intel to produce more than three million specialized artificial intelligence processing chips scheduled for delivery in 2028, according to a Monday report from The Information that cited sources familiar with the negotiations.
The report also indicated that Nvidia is considering whether Intel’s manufacturing capabilities could produce a specialized processor that merges four graphics processing units into one component, though no formal contract has been established with Intel at this time.
Following the news, Intel’s stock price jumped over 9% during early Monday trading, building on the company’s impressive 169% stock increase throughout this year as investors see signs of recovery under the leadership of Lip-Bu Tan.
When contacted for comment, Intel chose not to discuss the report, while both Alphabet and Nvidia have not yet provided responses to media inquiries. Reuters was unable to confirm the report through independent sources.
This substantial contract for Google’s proprietary artificial intelligence processors would strengthen Intel’s third-party manufacturing division as the company works to reclaim its former dominance in chip production, which it lost to Taiwan’s TSMC after a series of strategic missteps over recent years.
However, the explosive growth in chip demand driven by artificial intelligence applications has created supply shortages at TSMC. This capacity shortage has led multiple major AI chip companies to explore Intel as an alternative manufacturer, according to The Information.
Under Tan’s leadership, Intel has attracted billions in funding from the Trump administration, Nvidia, and SoftBank.
An administration official revealed last month that the Trump administration has actively worked to generate new business opportunities for Intel.
In April, Tesla CEO Elon Musk announced that the electric vehicle manufacturer intends to utilize Intel’s upcoming 14A production technology for chip manufacturing at its proposed Terafab facility, an advanced AI chip manufacturing complex planned for Austin.
The Wall Street Journal reported last month that Intel has negotiated a preliminary agreement to manufacture certain chips for Apple products after more than a year of intensive discussions.
Meanwhile, Google has been working to establish its proprietary AI processors as a competitive option to Nvidia’s market-leading graphics processing units, with revenue from its tensor processing unit sales contributing significantly to the company’s cloud computing division growth.
