Shares of Intel climbed and helped lift the overall chip trade after a report that Google plans to lean heavily on the company for its artificial intelligence hardware. The move stood out on a day when semiconductor stocks were already rallying.
According to The Information, cited by Bloomberg, Alphabet's Google will rely on Intel for more than 3 million specialized AI chips in 2028. The figure points to a substantial commitment from one of the world's largest technology companies.
The report says Google decided to tap Intel to make some of its tensor processing units, the in-house chips known as TPUs that power much of its AI work. The decision came after months of testing the chipmaker's technology, according to the same report.
For Google, turning to Intel would mean broadening the list of companies that manufacture its custom AI chips, rather than depending on a single supplier. For Intel, it would represent a high-profile order at a time when demand for AI hardware is intense.
The market reaction was immediate. Intel stock, which has been on a strong run this year and is up more than 200 percent, got a fresh bump on the report, and the news helped pull up the broader semiconductor trade.
Some caveats remain. According to Bloomberg, it is still not clear whether Intel would actually manufacture the chips or only package them, and some analysts cautioned that relying on Intel to produce such a large volume by 2028 could be a risk for Alphabet. The reported move comes as leading contract manufacturer TSMC struggles to keep up with surging demand for AI hardware.
The development landed during a wider rebound for technology shares. Intel was up about 13 percent on the day, chip stocks were poised for their best day in a year following a sharp selloff on Friday, and the report on Intel and Google added to the momentum across the sector.