Alphabet Inc. (NASDAQ: GOOGL) announced the development of a new AI chip, Frozen v2, aimed at enhancing the efficiency of its Gemini AI models. This news emerged on July 20, 2023, coinciding with the company’s Q2 earnings report scheduled for July 22. Shares of Alphabet rose over 1% following the announcement, marking a near 13% increase year-to-date.
The Frozen v2 chip is designed to embed parts of Gemini’s architecture directly into silicon, potentially improving performance by processing 6 to 10 times more tokens per watt compared to the current TPUs. However, production volumes may not meet TPU levels, and its hardwired nature may limit compatibility with future Gemini versions.
Alphabet is facing a significant internal AI computing capacity constraint that is impacting its cloud growth. The company’s Q2 report is expected to reveal earnings per share of approximately $2.86 on revenues of around $116.5 billion, marking a 21% year-over-year growth. Google Cloud’s performance, especially given its substantial backlog, will be a focal point for investors.
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