In a fresh report, Barclays claims that Google can earn as much as $252 billion in sales of its tensor processing units (TPUs) by shifting its business model. Google's TPUs are among the most widely used custom AI chips in the industry, and Barclays believes that the firm can further expand its platform by entering into joint ventures with asset managers Blackstone and Apollo Global, as well as chip designer Broadcom.

Google's TPUs are among the oldest AI chips in the market, and unlike NVIDIA, which sells its products to data center firms such as CoreWeave, the firm offers the TPUs through its Google Cloud business. Google's second-quarter earnings saw revenue from the Cloud business grow by a whopping 82% annually to touch $24.8 billion.

The firm had made inroads into the AI computing infrastructure race before ChatGPT's public release. Google started using its in-house AI processors in 2015 to beat Amazon to the punch by three years. It made the TPUs available to external customers in 2018, with analysts from D.A. Davidson outlining in September last year that the business could be worth $900 billion.

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Now, a report from Barclays claims that Google can generate as much as $252 billion from shifting its TPU business from Google Cloud to an off-platform merchant model. This model should likely see Google create joint ventures with asset managers Apollo Global and Blackstone, along with custom AI chip designer Broadcom, to outsource TPU capacity and enable the combined entity to offer the chips for computing capacity.

Such a move could lead to Google operating 11.5 gigawatts of TPU capacity, says the report, to generate the aforementioned revenue. The figures are estimates of 2028, and the report considers Google's joint ventures with Blackstone and others. The Blackstone deal was announced in May this year, through which the TPUs will be used to offer compute-as-a-service, or CaaS.

However, the heavy lifting will be done by Google's joint venture with Apollo and Blackstone, says the report. In June, Apollo and Blackstone led a $35 billion AI infrastructure funding platform with Broadcom to deploy the TPUs. As per Barclay's estimates, the deal could contribute $20 billion to Google's revenue by the year's end and grow the contribution to $67 billion in 2027 courtesy of 3.2 gigawatts of deployed TPU capacity.

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