Does Google have their own CPU design team for the cloud?
No, we buy from intel like everyone else
They do design other compute hardware, though. TPU's, PVC (with Intel), for example
I heard Google is developing a RISC-V core with a bunch of custom instructions
Don't be surprised if nobody from Google publicly confirms this. I would not be surprised if this is true.
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They may have a million designs but ultimately they buy boatloads of your products.