...Because they weren't impressed with those Zen server chips.
http://seekingalpha.com/article/4049545-intels-big-datacenter-win
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Almost certainly, AMD has tried to interest Google with Naples. Anandtech reported in August that development systems "are currently in the hands of select AMD partners for qualification and development." Apparently, Google wasn't impressed by what AMD had to offer, and chose to go with Intel when it announced its decision last November.
With the Google announcement, we see clearly Intel's modus operandi in dealing with AMD. There were no big product announcements or splashy media events. Everything was played very close to the vest. No information regarding release timing was given. Even the Investor Meeting contained very little for analysts to work with.
And Intel doesn't even make the announcement but leaves it to its partner to break the news. Intel appears to be targeting the large datacenter customers first with its chips before releasing them to server OEMs. This is a smart move because that's where the profitability and volume has shifted.
In case the reader hasn't noticed it, Intel is taking a page from the Nvidia (NASDAQ:NVDA) playbook. When Nvidia first announced its Pascal GPUs, the first customers to receive them were not the graphics card OEMs but Nvidia's datacenter customers. Nvidia then worked its way down market, stopping first with its high-end desktop GPU, the GTX 1080, then releasing successively lower priced versions. This strategy may have cost Nvidia some market share in desktop add-in boards, but it allowed Nvidia to capture the most lucrative GPU markets.
The Google announcement shows how different Intel's tactics are compared to AMD's. AMD has marketed its Zen CPUs through various levels of previews, pre-announcements and finally product launches, all designed to build anticipation. Along the way, it has featured cherry-picked benchmarks that it claims to show that its products are superior to Intel. While such marketing helps sell AMD to investors and fans, it also affords AMD's competition considerable advance warning of AMD's product plans.
Intel has done almost the exact opposite, giving away very little of its product plans, basically playing possum. This has led some to believe that Intel has no response to AMD, but we're seeing with the Google announcement that Intel very definitely has a response, at least in its core growth area of the datacenter.