Intel (INTC) stock skyrocketed more than 11% in premarket trading after reports emerged that Google and Nvidia are evaluating or selecting Intel as a backup AI chip foundry.
The Information reported that Google has placed an order with Intel to manufacture more than 3 million Tensor Processing Units in 2028, according to four people with direct knowledge of the discussions.
Google’s TPUs are in-house AI chips used to train and run AI models, and the order follows months of testing Intel’s advanced packaging technology.
Morgan Stanley estimates Google will produce more than 6 million TPUs across 2027 and 2028, making Intel’s slice of that production a meaningful contract.
Nvidia has not placed an Intel foundry order yet, but the chip giant is actively evaluating whether Intel technology could support a processor that combines four graphics chips into a single unit.
Specifically, Nvidia is testing whether Intel can successfully fabricate a complex processor that fuses four graphics chips into one unit, a design crucial for its upcoming Feynman GPU architecture.
Intel and Apple reportedly reached a preliminary agreement in May under which Intel will manufacture some of the chips powering Apple devices, further broadening Intel’s blue-chip customer roster.
Tesla CEO Elon Musk said in April that Tesla plans to use Intel’s 14A manufacturing process to make chips for its Terafab project, an advanced AI chip facility planned for Austin.
Landing Google as a customer and getting Nvidia to test its flagship 18A node represents a major validation of Intel’s foundry turnaround strategy as it competes with TSMC.
Intel is finding growing success in positioning itself as the premier US-based alternative to TSMC, at a time when domestic semiconductor manufacturing has become a national priority.
Analysts expect Intel’s foundry capacity to increase aggressively, with substantial expansion at multiple sites and improved yields on advanced nodes supporting a robust customer pipeline.
Profitability for Intel Foundry Services is expected in the second half of 2027, as the company moves to convert growing customer interest into sustained financial performance.
