Alphabet stock pops on report it's developing a more efficient AI chip
Alphabet shares rose following reports that the company is developing a custom server chip, 'Frozen v2,' to optimize the performance of its Gemini AI models. The project aims to improve efficiency and address internal compute shortages by 2028.
Why it matters
Developing custom silicon is a critical strategy for tech giants to reduce reliance on third-party hardware and lower the massive costs associated with running large-scale AI models.
Alphabet shares closed 1.51% higher on Monday after The Information reported the company is developing a new server chip, internally dubbed "Frozen v2," designed to run Gemini models more efficiently.
The chip would permanently embed parts of Gemini's architecture directly into the silicon, reducing the number of calculations and amount of data movement required to answer queries, according to the news outlet.
Alphabet told CNBC in a statement that its teams are "constantly researching and experimenting with new innovations to deliver maximum performance and efficiency for our users and customers" and that "while not every project moves into production, this rigorous exploration is central to our full stack approach."
"By co-designing our hardware and software from the ground up, we ensure our systems are integrated and highly optimized for real-world workloads," continued the statement.
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