Alphabet shares pop on report it is developing a more efficient AI chip

7:00 AM · July 20, 2026

Alphabet shares climbed 3 percent on Monday after The Information reported the company is developing a new server chip designed to run its Gemini models far more efficiently, according to CNBC. The chip, internally referred to as Frozen v2, would permanently embed parts of Gemini's architecture directly into the silicon itself, rather than running the model as general purpose software on top of more flexible hardware, a design choice that trades flexibility for efficiency. Google engineers reportedly project the chip could serve between six and ten times more tokens per unit of power than the company's newest AI chips, its current generation of custom TPUs, a substantial efficiency gain if it holds up in production. The company is said to be targeting 2028 for deployment, meaning any benefit is still several years away, but investors reacted immediately to the prospect of Google meaningfully reducing the power costs of running its AI models at scale, a growing concern across the industry as electricity availability increasingly constrains how much AI infrastructure companies can build regardless of how much capital they are willing to spend. If accurate, Frozen v2 would represent a further step in Google's long running strategy of designing custom silicon tightly coupled to its own models, rather than relying primarily on general purpose GPUs from Nvidia or AMD the way most of its major competitors do.