Kaiyuan Securities has released a report stating that Alphabet (GOOGL.US) introduced its eighth-generation TPU at Cloud Next '26, including the TPU 8t for training and the TPU 8i for inference. The TPU 8t utilizes OCS technology to enable automatic hardware topology reconfiguration, while the TPU 8i uses OCS for inter-group connectivity via Boardfly. The firm believes this new technological direction may expand market opportunities for optical modules, OCS, and liquid cooling solutions. The TPU 8t adopts a fully liquid-cooled architecture, which could increase the proportion of scale-out optical modules, while the TPU 8i is expected to drive higher demand for optical modules and OCS. Key viewpoints from Kaiyuan Securities are as follows:

Alphabet's Cloud Next '26 event, which opened on April 22 in Las Vegas, Nevada, featured the launch of two eighth-generation TPUs: the TPU 8t for AI model training and the TPU 8i for inference tasks. The TPU 8t incorporates OCS technology that allows automatic reconfiguration of hardware topology around faults without manual intervention. The TPU 8i’s Boardfly topology uses OCS to enable inter-group connectivity. The firm suggests that this event may mark the beginning of a new technology roadmap for Alphabet, potentially opening up growth opportunities in optical modules, OCS, and liquid cooling.

The TPU 8t is designed for large-scale training and may increase the scale-out optical module ratio, adopting a fully liquid-cooled architecture. For scale-up, the TPU 8t continues to use a 3D Torus topology, expanding a single SuperPod supernode from 9,216 chips to 9,600 chips, with shared high-bandwidth memory reaching 2PB. Inter-chip interconnect bandwidth has doubled compared to the previous generation. For scale-out, the v8 introduces a new Virgo network architecture, employing high-radix switches and a flattened two-layer non-blocking topology. Per-chip scale-out bandwidth has jumped from 100Gbps to 400Gbps, with overall data center network bandwidth increasing fourfold. A single Virgo network can connect up to 134,000 TPUs, scalable to millions of TPUs using JAX and Pathways frameworks. Cooling-wise, Alphabet Cloud states the TPU 8t uses fourth-generation liquid cooling, featuring full immersion and an upgraded centralized cooling distribution unit architecture.

The TPU 8i targets high-concurrency inference and may raise the scale-up optical module ratio while increasing OCS demand. For scale-up, the TPU 8i adopts a new Boardfly interconnect topology, where four TPUs form one BB unit, eight BB units form a Group via copper connections, and 36 Groups are interconnected via OCS to form a cluster. Compared to 3D Torus, this reduces the maximum hop count between any two chips in a 1,024-chip configuration from 16 to 7. A single SuperPod supernode has increased from 256 chips to 1,152 chips, with FP8 computing power rising 8.67 times and HBM capacity growing 5.74 times. For scale-out, the TPU 8i extends the Boardfly topology, using OCS optical circuit switching for dynamic link reconfiguration. Cooling for the TPU 8i also employs fourth-generation liquid cooling, similar to the TPU 8t.

Alphabet’s supply chain may continue to exceed expectations, highlighting investment opportunities across related sectors. For optical modules and optical chips, recommended stocks include Zhongji Innolight, Eoptolink, and Sanan Integrated Circuit; beneficiaries include Changxin Memory Technologies. For liquid cooling and pumps, recommended stocks include Envicool; pump beneficiaries include Feilong Auto Parts and Dayuan Pumps. For OCS, beneficiaries include Tengjing Technology, Focuslight Technologies, Guangku Technology, and Sai Microelectronics. For server power supplies, recommended stocks include Oulute. For optical components, beneficiaries include Yangtze Optical Fibre and Cable and T&S Communications.

Risks include slower-than-expected 5G deployment, delays in AI development, and U.S.-China trade tensions.