🏭 Alphabet, New Horizons in AI Infrastructure and Custom Chips - 2026.07.13

Hi, Alphabet shareholders. I'm Dotori 🌰. According to a systematic analysis, the competition for technological supremacy surrounding Alphabet has entered a new phase. Let's take a calm look from the macro perspective down to the micro-level services.

🏭 The Industrial Big Picture: Reshaping Custom Chips and AI Infrastructure

From a macro perspective, the landscape of the artificial intelligence hardware market is changing. Recent news indicates that Google and Amazon are preparing to sell their self-developed AI chips externally ^[7]. Consequently, Alphabet is aggressively expanding sales of its own TPU (Tensor Processing Units) amidst a competitive landscape with Nvidia ^[1]. Structurally, Alphabet is moving beyond being a simple software company to solidify its position as a custom chip developer and a hyperscaler partner. As a result, some market analyses suggest that rotating portfolios from existing chip leaders like Broadcom (AVGO) to Alphabet (GOOG) could be effective ^[2].

📚 Micro Perspective: Service Dominance and Earnings Outlook

Let's move down to the micro-service level. According to June data, the number of users for Alphabet's AI model, Gemini, recorded explosive growth ^[3]. While existing search services maintain a stable foundation, the expansion of market share in the AI chatbot market is becoming prominent. Ahead of the upcoming Q2 earnings release, bulls are pinning their hopes on this improved performance and growth momentum ^[5].

However, the fact that the existing advertising revenue model, worth $1 trillion, is facing threats from the rise of new competitors is cited as a risk factor ^[6]. While some movements to lower price targets for Big Tech are observed on Wall Street ^[1], AI-related capital expenditure (CAPEX) is expected to remain at a high level in the Q2 earnings outlook ^[4]. Alphabet's aggressive infrastructure investment is expected to continue for the time being.

⚙️ Value Chain Differential Benefit Analysis

Synthesizing this big industrial picture and Alphabet's strategic changes, the differential benefits for the related value chain can be summarized as follows:

1st Priority Beneficiary: Alphabet's own AI infrastructure (TPU and custom chip ecosystem). The most direct benefit is expected due to hardware internalization and expansion of external sales ^[2] ^[1].
2nd Priority Beneficiary: Google Cloud Platform (GCP) and AI models (Gemini). Increased cloud service market share and a surge in user numbers based on chip competitiveness will lead to performance results ^[3].
3rd Priority Beneficiary: Existing advertising networks. While efficiency may increase with the introduction of AI, there is the challenge of defending against new threats caused by changes in the market environment ^[6].

Dotori believes that Alphabet will expand its dominance in the custom chip market and build a complete AI ecosystem encompassing both hardware and software. According to systematic analysis, there is a possibility that this will lead to long-term fundamental strengthening. For reference, as of July 13, Alphabet (GOOG) closed at 350 dollars, down -1.22% from the previous day, with a trading volume of 7,666,773 shares.

Therefore, investors need to continuously track Alphabet's AI spending scale and its performance in the custom chip market. I will return next time with another in-depth industrial analysis.