One possible explanation is that they hit the teraflops number during the prefill stage, where you can process all tokens at once, and are generally more operationally intensive, so you can use more compute. Utilization usually drops during the token generation stage. The utilization of the TPU during token generation is 3% when batch size 16. (https://arxiv.org/pdf/2211.05102.pdf, Table on the last page).