Alphabet Inc.’s Google executives are considering dropping Broadcom Inc. as a supplier for artificial intelligence chips as soon as 2027 as the tech giant seeks to develop in-house capacity, The Information reported Thursday, citing an unidentified person familiar.
The ambition to develop tensor processing chips came after a months-long pricing dispute between the companies this year, according to the Information. The move could save Google billions of dollars annually, the report said.
Spokespeople for Google and Broadcom did not immediately respond to a request for comment.
Broadcom shares fell 5.5% in premarket trading. It has gained 49% so far this year.
Companies like Google and Microsoft Corp. have poured money into developing AI models, helping fuel a boom among semiconductor makers that can produce chips for the technology.
Broadcom Chief Executive Officer Hock Tan told investors in June that he expects AI-related chip sales could account for more than a quarter of the company’s revenue soon.
Google Cloud announced a program to design tensor processing units, which are tailor-made for a branch of AI called neural network machine learning, in 2016. It has worked with Broadcom to produce them since that year, according to The Information.
