Alphabet NASDAQ:GOOGL shares climbed about 3% on Monday after a report said the company is developing a next-generation artificial intelligence server chip designed to improve the efficiency of its Gemini AI models.
The reported custom processor, code-named "Frozen v2," is expected to deliver substantially higher performance per unit of energy than Google's current tensor processing units, potentially generating six to 10 times more AI tokens while consuming the same amount of power.
The report said Alphabet is targeting deployment of the chip as early as 2028 as it works to expand its in-house AI computing capabilities. The initiative is intended to ease growing infrastructure demands tied to large AI models while reducing the cost and energy required to train and run advanced AI applications.
Alphabet has been investing heavily in custom silicon to support its AI strategy and lessen reliance on third-party hardware. A more efficient server chip could strengthen the company's Gemini platform as competition intensifies among major technology companies developing generative AI systems.
Shares of Alphabet rose on Monday trading following the report, reflecting investor optimism that continued investment in proprietary AI infrastructure could support the company's long-term artificial intelligence ambitions.