Alphabet AI Chip Sales Boost Cloud and Drain Cash
Alphabet is generating billions selling its custom artificial intelligence chips to external customers. While this strategy accelerates cloud revenue growth, building hardware inventory creates near-term cash flow pressures.
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ALPHABET INC-CL A is generating billions of dollars from custom AI chips, but soaring hardware inventory costs drove shares down 11% following a quarter of cash burn. The surge in demand for proprietary processors puts the tech giant in direct competition with NVIDIA CORP while testing investor patience over infrastructure spending. Google Cloud revenue more than doubled in the September quarter, driven largely by sales of its tensor processing units.
