As Nvidia recovers from the market crash, Google is in talks of creating its first autonomous robot. And now, according to the latest news, they will be working with Taiwanese semiconductor manufacturer, MediaTek to tap into cheaper TPUs, or tensor processing units.

What does it mean for Broadcom?

According to the reports, Google won’t be severing ties with the company they have worked with since 2015, and will still be co-designing the AI chips. It marks a shift in Google’s strategy to improve AI capabilities, and diversify its partnerships as there is increased demand for AI and a competitive edge from China.

The TPU chips are integral to powering services like Google search, YouTube, and Gemini AI models. The main reason Google is partnering with MediaTek is the low costs, and they have a strong connection with TSMC (Taiwan Semiconductor Manufacturing Company).

What’s next?

Besides working with MediaTek, Google also designs its own AI server chips. These chips are for internal research and development, made available to cloud customers. Manufacturing their own chips gives them a competitive stance in the AI market by reducing their reliance on Nvidia, a dominant player in the chip industry. Google wants to remain competitive where OpenAI and Meta are also striving for dominance.

Google also launched its sixth-generation TPU​ last year, an alternative to Nvidia chips for itself and its Cloud clients. They also spent between $6 billion and $9 billion on TPUs based on AI semiconductor revenue targets by Broadcom. Despite that, Google is still Nvidia’s biggest customer, having ordered $10 billion worth of Blackwell chips.

MediaTek will handle I/O modules:

To reduce the competition, Google will design most of the TPUs in-house, while MediaTek will handle the design of I/O modules in this planned partnership. As MediaTek is also in liaison with TSMC, they will be responsible for quality control.

The move to make operations in-house while using the same manufacturers in TSMC might turn out beneficial for Google in the long run. In the end, MediaTek’s expertise and competitive pricing make it an attractive choice for Google’s ambitious AI projects.

HONESTAI ANALYSIS: Even though Google is manufacturing in-house AI chips, they are still relying on external partners like Broadcom and MediaTek for chip production, packaging, and quality testing. None of the companies have any official statement in relation to this.