Alphabet Enlists MediaTek for Next-Gen TPUs, Flags $0.01 Dividend Boost and $1.1B AI Startup Investment
Alphabet is integrating MediaTek into I/O and packaging for its next-generation TPU training chips, while Broadcom will handle inference and TSMC is set to manufacture, reflecting a partner-based strategy for its AI hardware. Concurrent corporate moves include OpenAI ending Microsoft’s exclusivity—opening its AI models to Google—Alphabet’s plan for only a $0.01 dividend hike as capex may double, and backing UK startup Ineffable’s $1.1B seed round.
1. MediaTek Partnership for AI Chips
Alphabet is spearheading core TPU training chip design in-house while outsourcing I/O and packaging to MediaTek, inference chip development to Broadcom and wafer manufacturing to TSMC. This collaborative model aims to accelerate next-generation AI hardware deployment and reduce reliance on external design partners.
2. OpenAI Exclusivity Ends, Opens Access for Google
OpenAI’s termination of Microsoft exclusivity frees its AI models and services for licensing on rival clouds, including Google Cloud. This move could enhance Alphabet’s competitive positioning in cloud-based AI offerings by integrating advanced language and vision models.
3. Modest Dividend Growth as AI Capex Rises
Alphabet plans a $0.01 per share quarterly dividend increase following a 5% bump to $0.21 last year, keeping its payout ratio below 8%. Management prioritizes scaling AI infrastructure capex—which analysts expect may double from 2025 levels—over larger shareholder payouts.
4. Strategic Investment in UK AI Startup Ineffable
Alphabet participated in a $1.1 billion seed round for Ineffable Intelligence, valuing the UK-based startup at $5.1 billion. The funding supports Ineffable’s autonomous “superlearner” development and complements Alphabet’s broader strategy of investing in cutting-edge AI ventures.