OpenAI turns to Google’s AI chips to power its products, source says

(Reuters) -OpenAI has recently begun renting Google (NASDAQ:GOOGL)’s artificial intelligence chips to power ChatGPT and its other products, a source close to the matter told Reuters on Friday.

The ChatGPT maker is one of the largest purchasers of Nvidia (NASDAQ:NVDA)’s graphics processing units (GPUs), using the AI chips to train models and also for inference computing, a process in which an AI model uses its trained knowledge to make predictions or decisions based on new information.

OpenAI planned to add Google Cloud service to meet its growing needs for computing capacity, Reuters had exclusively reported earlier this month, marking a surprising collaboration between two prominent competitors in the AI sector.

For Google, the deal comes as it is expanding external availability of its in-house tensor processing units (TPUs), which were historically reserved for internal use. That helped Google win customers including Big Tech player Apple (NASDAQ:AAPL) as well as startups like Anthropic and Safe Superintelligence, two ChatGPT-maker competitors launched by former OpenAI leaders.

The move to rent Google’s TPUs signals the first time OpenAI has used non-Nvidia chips meaningfully and shows the Sam Altman-led company’s shift away from relying on backer Microsoft (NASDAQ:MSFT)’s data centers. It could potentially boost TPUs as a cheaper alternative to Nvidia’s GPUs, according to the Information, which reported the development earlier.

OpenAI hopes the TPUs, which it rents through Google Cloud, will help lower the cost of inference, according to the report.

However, Google, an OpenAI competitor in the AI race, is not renting its most powerful TPUs to its rival, The Information said, citing a Google Cloud employee.

Google declined to comment while OpenAI did not immediately respond to Reuters when contacted.

Google’s addition of OpenAI to its customer list shows how the tech giant has capitalized on its in-house AI technology from hardware to software to accelerate the growth of its cloud business.