Alphabet (GOOGL) Places An Order With Intel To Manufacture More Than Three Million Tensor Processing Units In 2028
Alphabet has placed an order with Intel to manufacture more than three million TPUs for 2028, a significant vote of confidence in Intel Foundry's advanced process roadmap. The deal validates Intel's foundry pivot at a critical moment but raises questions about whether INTC can execute — and whether GOOGL reduces its dependence on TSMC.
What happened
Alphabet has placed an order with Intel to manufacture more than three million TPUs for 2028, a significant vote of confidence in Intel Foundry's advanced process roadmap.
The read · Jun 13
INTC's foundry pivot gets a high-profile hyperscaler anchor order from GOOGL — the question is whether this 2028 commitment is enough to justify re-rating a business that still posted near-zero net margins and negative EPS in FY2025.
Wrong if
Intel fails to meet 18A process node yield targets or timeline, causing Alphabet to reduce/cancel the order — which would be a severe negative catalyst. Also, if this order is later revealed to be a partial or conditional commitment, the re-rating reverses.
CoverageSource: Yahoo Finance · Published here SAT, JUN 13 · 1:59 PM ET · the only report in this recordHow this is decided →
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The story1 min read
Alphabet has reportedly placed an order with Intel to manufacture over three million Tensor Processing Units slated for 2028, marking one of the largest disclosed AI chip foundry contracts for Intel Foundry Services. The deal is strategically significant for Intel, which has been aggressively courting hyperscaler customers to anchor its foundry business after years of manufacturing stumbles and a near-zero net margin in FY2025. Intel reported -$0.06 diluted EPS and essentially flat revenue of $52.9B in FY2025, making any major foundry win an outsized positive signal.
For Alphabet, the order suggests a deliberate effort to diversify TPU manufacturing away from TSMC reliance, reducing geopolitical concentration risk while potentially locking in capacity ahead of 2028 AI compute demand. The key watch items: Intel's ability to deliver on its 18A process node timeline, whether this is a pilot order or the beginning of a broader GOOGL-INTC foundry relationship, and how the market reprices INTC's foundry narrative against its still-thin margins and execution history.
The read, in fullWhy it matters
Intel's foundry business has been the primary drag and strategic question mark on the stock; a 3M+ TPU order from Alphabet — one of the world's largest AI spenders with $402.8B in revenue — is the kind of anchor customer win that can shift the market's probability estimate on foundry viability. INTC trades at depressed valuations given -$0.06 EPS and ~0% net margin, meaning any credible signal that foundry revenue is real has asymmetric upside in the narrative. The 2028 timeline is distant but the order signals Alphabet is betting Intel's 18A process will be viable, which is new information.
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The read above, as written. kept as written
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4-8 weeks on foundry re-rating narrative. Follow to be told when one lands.
▲ The case it holds
A 3M+ TPU order from Alphabet — a company generating $402.8B in annual revenue with massive ongoing AI capex — provides Intel Foundry with the hyperscaler anchor win it has lacked, potentially unlocking further customer commitments and a genuine re-rating of the foundry segment's terminal value.
▼ The case it breaks
Intel printed -$0.06 diluted EPS and near-zero net margin in FY2025 on flat revenue, meaning the foundry business remains deeply unproven at scale, and a 2028 delivery date gives ample time for Alphabet to walk back or redirect the order if Intel's process nodes disappoint.
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