Google started selling its TPUs to outside data centers last quarter (Q2-2026)

**TL;DR**

* **Negative FCF**: Google booked negative quarterly free cash flow of about **-$5.9B** after **\~$45B** of capex in a single quarter
* **The Big Shift**: Starting this quarter, Google began selling its TPU chips to outside data centers
* **Cloud Surge**: Google Cloud revenue jumped **\~82%** to **\~$25B**, and signed backlog is now **\~$520B** (almost all of it Cloud)
* **Nvidia Challenger**: For a decade (since May 2016) TPUs were Google's private weapon. Now they're selling them!

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Understandably, everyone's talking about the first negative FCF Google faced since the company turned public in **2004** and the \~**$85B** equity capital raise on 1st of June 2026 (Berkshire Hathaway anchored **$10B** of it, at a small discount to the public offering price. Upsized from **$80B**). That's all real, and Capex is genuinely exploding, but why is no-one talking about the start of the TPU chips sale that is stated in the Cloud revenue notes:

>In addition, in the second quarter of 2026, we began recognizing revenue from the sale of TPU systems.

Since Google unveiled TPUs to the public in May **2016**, if you wanted one, you needed to rent it inside Google Cloud and that was the only place you could get access to them. The whole point was to keep the best custom AI silicon chips as an exclusive asset and make people come to them for it. Now they're selling them to third parties, which is the first time a hyperscaler with real chip maturity has gone head to head against Nvidia.

Google won't say how big it is yet. It's disclosed under a new "**Product sales**" line inside Cloud (hardware + integrated software), not a standalone number. What we can see is that cloud operating income roughly tripled and the segment margin went from about **21%** to **36%** in a year. I am not saying the TPU sales are the main driver as they've already mentioned TPU sales were a "**small amount**" in their earnings call, but something we should keep an eye on in the future!

The backlog contains **\~$520B** of remaining performance obligations, and basically all of it is Google Cloud. Selling TPUs directly is one way to fill it without building every data center themselves.

I remain bullish on Google and I like their direction of selling TPUs to the outside world, what's your take?

You can find my full analysis on the current state of google on my free substack here:

[https://secaura.substack.com/p/the-current-state-of-google-goog](https://secaura.substack.com/p/the-current-state-of-google-goog)