SemiAnalysis: Gemini Lags Behind, GCP Sells TPUs to Third Parties for Profit

ChainCatcher report: Research firm SemiAnalysis has released an analysis stating that Google DeepMind is no longer among the leading AI labs. A week prior, DeepMind co-founder Demis Hassabis stepped down from day-to-day operations, and key figures including Google’s Chief Scientist Jeff Dean and Gemini co-lead Oriol Vinyals departed to found a new lab, Discovery Loop. The analysis concludes that Google’s long-standing internal struggle over compute allocation between Gemini and GCP has been resolved in GCP’s favor. SemiAnalysis notes that Gemini 3.5 Pro has been canceled, and Gemini 3.6 Flash underperforms compared to China’s top open-source models and Grok 4.5, causing Gemini to drop to 8th or 9th place in current large model rankings. Meanwhile, GCP is aggressively selling TPU units to competitors such as Anthropic, having secured long-term leasing and sales contracts for hundreds of thousands of TPUs over the past nine months. Tokenomics modeling estimates Gemini’s annual recurring revenue (ARR) at approximately $12 billion, while GCP’s third-party AI cloud service revenue is projected to exceed $73 billion by the end of 2027, with additional TPU system sales contributing over $120 billion. GCP’s latest quarterly growth rate was 82%, and it is expected to accelerate to over 100% by 2027 due to TPU system sales, contributing approximately $3 per share to Google’s earnings.