Microsoft-backed OpenAI, a significant consumer of Nvidia's AI chips, has commenced renting Google's Tensor Processing Units (TPUs) to power its flagship product, ChatGPT, and other offerings. This strategic move, first reported by The Information and subsequently corroborated by Reuters, marks a pivotal shift for OpenAI, as it represents the first meaningful deployment of non-Nvidia semiconductor technology for the company. The decision underscores OpenAI's intent to diversify its chip suppliers beyond Nvidia, a company whose Graphics Processing Units (GPUs) are extensively used by OpenAI for both model training and inference computing – the process where an AI model applies its trained knowledge for predictions.

This adoption of Google's TPUs, facilitated through Google Cloud, is primarily aimed at reducing the substantial costs associated with inference computing. Furthermore, it signals a deliberate move by the Sam Altman-led company to lessen its reliance on its primary backer, Microsoft's data centers. The transition could potentially elevate the status of TPUs as a more cost-effective alternative to Nvidia's GPUs in the burgeoning AI landscape.

The collaboration between OpenAI and Google is particularly notable given their competitive standing in the artificial intelligence sector. While Google is expanding the external availability of its in-house TPUs, which were historically reserved for internal use, it is reportedly not leasing its most powerful TPUs to OpenAI. This expansion of Google's TPU offerings has already attracted other prominent clients, including Apple, as well as AI startups like Anthropic and Safe Superintelligence, both founded by former OpenAI leaders and considered direct competitors.

For Google, integrating OpenAI into its customer base highlights how the tech giant is effectively leveraging its comprehensive in-house AI ecosystem, spanning from hardware to software, to accelerate the growth of its cloud business. Despite the significant implications of this arrangement, both OpenAI and Google have not yet issued official announcements regarding the reported deal.