- Google is developing a new server chip called Frozen v2, designed to optimize its Gemini AI model with a potential launch as soon as 2028.
- The chip promises six to ten times greater efficiency and faster query responses than current custom chips, but it is separate from Google’s existing TPUs already in production.
- Alphabet (GOOGL) shares rose 1.6% on the news, though the company faces near-term headwinds including a delayed Gemini Pro release and the loss of senior researchers to rivals.
Shares in Google parent Alphabet (GOOGL) climbed Monday after reports emerged that the company is developing a new server chip, dubbed Frozen v2, specifically designed to optimize its Gemini AI model. According to The Information, the chip could launch as soon as 2028 and is separate from Google’s existing tensor processing units already in production.
The new semiconductor would run six to ten times more efficiently and respond to queries more quickly than current custom chips, offering a significant performance leap. However, Alphabet told CNBC in a statement that not every experimental project moves into production, adding that “this rigorous exploration is central to our full stack approach.”
Consequently, the stock gained 1.6% on Monday, helping to partially reverse a 5% decline since June 20. Despite the positive chip news, Google’s AI efforts face more immediate challenges, including a delayed next Gemini Pro release and the departure of several senior researchers to rivals.
Meanwhile, Chinese AI models have gained traction with American businesses, now accounting for 45% of U.S. company token use. With earnings scheduled for Wednesday, analysts remain hopeful that a solid report and the new chip news could spark a rally for GOOGL, which has already climbed 11% in 2026.
Financial institution BMO Capital last week doubled down on its price target, with Managing Director Brian Pitz maintaining a buy rating. Wall Street analysts have issued buy calls ahead of the report, anticipating positive momentum from the upcoming earnings release.
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