Google Cloud will sell some of its in-house TPU AI chips to external customers, The Register reported on April 30.

According to the report, Alphabet CEO Sundar Pichai said on the first-quarter earnings conference call that demand for TPUs is increasing in AI research labs, capital markets companies and high-performance computing. "We will start supplying TPUs to some customers for their own data centres," he said.

CFO Anat Ashkenazi said some TPU sales revenue will occur this year, but it will not be fully reflected in financial statements until 2027. TPU sales revenue may fluctuate by quarter depending on shipment timing, she added.

Pichai said external chip sales would help secure funding needed for next-generation semiconductor research and enable economies of scale. Amazon Web Services has also hinted at the possibility of selling its in-house chips externally.

Google Cloud's first-quarter revenue totalled $20 billion, up 63 percent from $12.26 billion a year earlier. Remaining performance obligations stood at $460 billion, nearly doubling from the previous quarter. Ashkenazi said she expects more than half of that backlog to be recognised as revenue within the next 24 months.