Google's TPU Strategy Shift: Selling Custom AI Chips to Neoclouds

The Fluidstack / TeraWulf Deal: $3.2B Backstop and 14% Stake

This complex deal is often conflated. Here are the facts from authoritative sources:

• August 2025: TeraWulf signed 200+ MW, 10-year hosting agreements with Fluidstack, an AI cloud provider. Google backstopped $1.8 billion of Fluidstack's lease obligations to support project debt financing and received warrants to acquire approximately an 8% equity stake in TeraWulf .
• August 18, 2025: Google added an additional $1.4 billion in backstop support, bringing its total financial commitment to approximately $3.2 billion. In return, Google obtained additional warrants, elevating its total stake in TeraWulf to 14%, making it the largest shareholder .
• Crucial clarification: The $3.2 billion backstop and 14% equity stake are in TeraWulf (a bitcoin miner converting to AI hosting), not in Fluidstack directly. Google struck a deal with Fluidstack to host TPUs at TeraWulf's Lake Mariner, NY facility, and the backstop secures Fluidstack's lease obligations .
• Fluidstack also has two 10-year hosting agreements with TeraWulf totaling $6.7 billion in contracted revenue starting in 2026, supported by Google's financial guarantee .

Crusoe and CoreWeave: Approaches Without Firm Deals

Google approached Crusoe and CoreWeave about hosting TPUs in their data centers, as reported by The Information in September 2025 . However, no publicly announced finalized deal terms were found for Crusoe. More significantly, CoreWeave publicly stated it does not expect to deploy Google's TPUs any time soon, along with Nebius and Lambda .

The Blackstone Joint Venture: $5B for 500 MW of TPU Capacity

On May 18, 2026, Blackstone and Google announced a joint venture to create a new U.S.-based company offering Google Cloud TPUs as compute-as-a-service . Key terms:

• Blackstone's commitment: $5 billion in initial equity
• Capacity target: 500 MW of TPU capacity online by 2027
• Google's role: Supplies TPUs, software, and services
• The deal was described as "the largest single-day AI-infrastructure capital event" and the first major neocloud anchored by Google's TPUs
• Reports suggest the total venture value including leverage could reach ~$25 billion

Ironwood (TPUv7) Specs

Google's latest TPU generation, Ironwood (also documented as TPU7x), was announced in April 2025 at Google Cloud Next:

• 192 GB HBM capacity per chip — confirmed in official Google Cloud documentation
• 6x increase in HBM capacity over the prior Trillium generation (which had 32 GiB per chip)
• 7.37 TB/s HBM bandwidth per chip
• 9,216 chips per superpod with shared memory of 1.77 PB
• Dual-die architecture with 4,614 TFLOPS FP8 performance per chip
• 42.5 exaflops of FP8 compute at full superpod scale

Known TPU Customers

• Anthropic — Committed to deploying over one million TPU chips to support its Claude model
• Apple — Named in industry chatter as testing external TPU demand
• Meta — Mentioned in context of a multibillion-dollar rental deal with potential future purchases
• Safe Superintelligence (SSI) — Listed among customers, though specific deal terms were not detailed in the available sources

How This Compares to Microsoft and Amazon

• Microsoft — Its custom AI silicon (Maia) is used exclusively within Azure. Microsoft has not made Maia available to third-party cloud providers.
• Amazon — Its custom Trainium and Inferentia chips are available through AWS but are not sold or licensed to third-party cloud providers for independent deployment.
• Neither company has announced any equivalent strategy of selling custom AI chips to neoclouds, hosting them in third-party data centers, or creating a joint venture to offer their custom silicon as third-party compute-as-a-service.

Notable Uncertainty and Pushback

As of July 2026, major neoclouds Nebius, Lambda, and CoreWeave have all said they are unlikely to buy Google TPUs any time soon, creating a potential distribution bottleneck for Google's strategy .

Note on Morgan Stanley Projections: The search budget was exhausted before reaching the original Morgan Stanley report. The sources gathered reference supply chain analysts seeing "massive upward revisions for Broadcom/Google TPU orders" for 2026 and projections of TPU v6 physical sales beginning, but the specific Morgan Stanley projection of 7 million TPU units by 2028 generating $13 billion in new revenue was not confirmed in the sources captured. This specific figure requires separate verification from the original Morgan Stanley research note.