TradingKey – Morgan Stanley’s latest estimates show that as Google (GOOGL) ramps up external sales of its self-developed TPUs, Alphabet’s AI chip business could become a new growth engine for Google Cloud. The bank estimates that TPU-related Google Cloud revenue could reach $84 billion in 2027 and $108 billion in 2028, totaling nearly $200 billion over the two years.

In his new estimation model, the firm’s analyst Brian Nowak expects Google to sell approximately 0.3 GW of TPU systems in the second half of 2026, increasing to 3.2 GW in 2027 and further rising to 4.2 GW in 2028. Meanwhile, the bank raised its gross margin assumption for TPU system sales from 20% to 30%, believing that Google’s expanded custom chip cooperation with Marvell…