June 8 (Reuters) - Alphabet's Google has placed an order with Intel to manufacture more than three million tensor processing units in 2028, The Information reported on Monday, citing people with direct knowledge of the discussions.
Nvidia is also evaluating whether Intel's technology can be used to make a processor that combines four graphics chips into a single unit, although it has not placed an order with the company yet, the report said.
Intel's shares rose more than 9% in early trading, set to
add to the nearly 169% gain so far this year, on the back of signs of steady turnaround progress at the company since Lip-Bu Tan took the helm.
Intel declined to comment on the report, while Alphabet and Nvidia did not immediately respond to requests for comment.
Reuters could not independently verify the report.
The potential order for Google's in-house AI chips would bolster Intel's contract chip manufacturing business and comes as the company tries to claw back its chipmaking crown that it lost to Taiwan's TSMC following years of management blunders.
But soaring chip demand from the AI boom has left TSMC struggling to bring in adequate supply. That capacity crunch has prompted several major AI chip design companies to turn to Intel, The Information said.
Since Tan took charge, Intel has secured billions of dollars of investments from the Trump administration, Nvidia and SoftBank.
The Trump administration has also been trying to drum up business for Intel, an official said last month.
Tesla CEO Elon Musk said in April that the EV maker plans to use Intel's next-generation 14A manufacturing process to make chips at its Terafab project, an advanced AI chip complex he has envisioned in Austin.
Last month, the Wall Street Journal reported that Intel has reached a preliminary deal to make some chips for Apple devices following intensive talks for more than a year.
Google, meanwhile, has been pushing to make its in-house AI chips a viable alternative to Nvidia's dominant GPUs, with sales of its tensor processing units becoming a growth driver for the company's cloud revenue.
(Reporting by Anhata Rooprai in Bengaluru; Editing by Shreya Biswas and Sriraj Kalluvila)
