Alphabet's Google has signed a multibillion-dollar deal with Meta Platforms to rent out its tensor processing units for AI model development, according to a report from The Information. The multi-year agreement will see Meta use Google's custom AI chips to build new artificial intelligence models, marking a significant expansion of Google's cloud computing business.

This deal positions Google to compete more directly with NVIDIA in the high-stakes AI chip market, where the search giant has been trying to expand adoption of its specialized hardware. While Google's AI chips have gained traction among some startups, the company still faces manufacturing constraints and limited interest from major cloud providers. The move comes as Meta races to catch up with rivals in developing advanced AI models.

Meta's parallel deal with AMD this week underscores the intense competition for computing power in the AI arms race. By securing access to multiple chip suppliers, Meta gains flexibility in its infrastructure strategy while potentially reducing dependence on any single vendor. The Google agreement represents a strategic win for Alphabet's cloud division, demonstrating that its custom silicon can compete for major enterprise workloads beyond its own operations.