Meta has signed a multiyear deal to rent TPU artificial intelligence chips. The contract is worth several billion dollars, The Information reported on Feb. 26 local time.

Meta plans to use the TPUs under the deal to train new AI models. Meta is also in talks with Google about a plan to bring TPUs directly into its own data centres from next year.

The Information said the deal was a strategic win for Google and a threat to Nvidia.

Google secured Meta as a major TPU customer, giving it a foothold to expand its chip business. Nvidia currently leads the AI chip market and has supplied Meta with GPUs to support AI model training.

Google is also pushing to set up a joint venture with private equity firms to expand TPU supply. The joint venture would buy TPUs and rent them out to other AI companies. Google has already signed a contract with one large investment firm, The Information said.

Meta's move is drawing attention because it uses TPUs for AI training. Market experts have viewed AI inference as the area where chip opportunities to replace Nvidia exist. A dominant view has been that it is hard to compete with Nvidia in training, which requires large server clusters.

But recently, there have been more cases of using chips that Nvidia makes for training as well.

Anthropic has already used TPUs to train and run AI models. Nvidia CEO Jensen Huang is said to be keeping a close watch on the fact that leading AI models at Google and Anthropic were developed on TPUs rather than Nvidia GPUs.