Analysts suggest that Google's (GOOGL, Financial) artificial intelligence chip division could potentially rival Nvidia (NVDA) and become one of Google's most valuable assets. These AI chips, designed in-house, are used in AI data centers and work alongside semiconductors from companies like Nvidia. Google also operates DeepMind, an AI business that competes closely with ChatGPT creator OpenAI.
According to Gil Luria, an analyst from financial services firm DA Davidson, the AI division of Google could be valued at over $700 billion, or $60 per share. Currently, Google's market capitalization stands at approximately $2.5 trillion, with shares priced at around $200. Luria points out that a significant portion of Google's potential value lies in its Tensor Processing Units (TPUs), which enhance AI computing capabilities.
Luria used a sum-of-the-parts analysis to estimate the value of Google's various business segments. This method also attempts to downplay the value of Google's search business, which was deemed a monopoly by the US Department of Justice in August, potentially leading to a separation of Google's search engine and digital advertising market.
