Google unveils new AI chip variants as cloud demand surges

Nov 9 (Reuters) - Alphabet's Google introduced two new variations of its in-house tensor processing units on Monday, stepping up its challenge to Nvidia's dominance in the booming market for artificial intelligence chips.

Alphabet shares were up more than 3% in early trading.

Google's TPUs have primarily been used internally for products such as Search, YouTube and Gemini, but the company has been making the chips available through its cloud business to attract enterprise AI customers.

TPU sales made a meaningful contribution to results in the September quarter, according to Alphabet, with Google Cloud revenue more than doubling to $30.71 billion.

The new chips, 8tx and 8i Max, are redesigned versions of existing processors tailored for specific customer needs, according to the company. Bloomberg News first reported the development earlier in the day.

The 8tx is aimed at government agencies and companies in regulated industries that need to keep sensitive data protected while it is being processed.

It pairs Google's chip technology with AMD's processors and encrypts data at the hardware level, delivering up to twice the speed of the previous version with virtually no trade-off in performance, the company said.

The 8i Max, meanwhile, is designed for AI applications that need to process very large amounts of information at once.

It combines two chips into a single package to provide additional memory and computing power, the company said, making it well suited for coding assistants, mathematical reasoning and drug-discovery tasks.

(Reporting by Anhata Rooprai in Bengaluru; Editing by Jonathan Ananda)