Google TPU's Rise vs. NVIDIA's AI Chip Dominance: Competitive Dynamics & Investment Insights

Google’s 7th-gen TPU Ironwood (3nm process,192GB HBM) delivers 15-30x performance vs. GPUs in dense matrix operations and 30-80x better energy efficiency [1]. Anthropic’s multi-billion-dollar deal to deploy 1M TPUs by 2026 reduces its NVIDIA dependency from75% to <40% [1]. NVIDIA remains dominant with ~80% AI accelerator market share, Blackwell chips sold out, and Q3 data center revenue up 66% YoY to $51.2B [6]. Its CUDA ecosystem (4M developers) creates high switching costs [6].

Reddit users note Google’s TPU+OCS architecture advantages but acknowledge ongoing NVIDIA GPU use for flexible workloads. Xueqiu user “古董鱼” argues Google’s TPU is closed-source (no CUDA support) and lacks NVIDIA’s global supply chain [12]. They recommend investments in Lumentum (LITE) for optics, SanDisk for NAND flash, and Bloom Energy for AI’s energy needs [12].

Google’s TPU is a strong niche player but cannot displace NVIDIA short-term due to CUDA’s moat and global supply chain. NVIDIA is a top short-term pick, while Google’s vertical integration offers long-term potential. Key investments:

1. Optics: Lumentum (LITE) for OCS components [12]
2. Storage: SanDisk for NAND flash [12]
3. Energy: Bloom Energy to address AI power bottlenecks [12]