Broadcom shares jump today as the company confirms a deal to develop and supply Google's in-house

chips for the next five years. What's the long-term impact for Alphabet? Our McKenzie Segalos is looking

into that in today's tech check. Good morning, Mac. Hey, Carl. So Broadcom shares getting a much bigger

bounce than Alphabet this morning, but longer term, Google may be the real winner from this chip deal.

For years, TPUs were Google's internal secret weapon, these custom-built chips designed to handle

its own workloads like training, search, and running Gemini. They've been available publicly

through Google Cloud since 2018, and now we're in the phase where customers like Anthropic,

meta, and other major AI players are leaning into the Google stack, with some reportedly

leasing and others buying Google's TPUs directly as they look for cheaper alternatives to

NVIDIA's GPUs. And that demand is only accelerating. Anthropics computing capacity from

Google's chips alone is set to more than triple by next year. Now, TPUs are designed to speed up

AI workloads. They're not as flexible as NVIDIA's chips, but they are less expensive and

more efficient for the jobs they were built to do. And increasingly, they're shifting from an internal efficiency tool

to a core pillar of Alphabet's AI revenue strategy.

DA Davidson estimates that Google's chip business could capture 20% of the AI market

over the next few years, making it a roughly $900 billion opportunity, potentially,

worth more than Google Cloud itself. And it really underscores Google's edge in AI vertical

integration. Unlike its big tech peers, it has the chips, the cloud platform, the Gemini models,

and the consumer products all under one roof. And Google still

trades at a discount to Apple and Amazon. So you've got a company with what analysts are calling

a credible new revenue driver and a market that hasn't fully priced it in yet. Guys?

Got to say, Mac, remember last summer where it was all about existential risk for search?

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