This is a clever side-channel attack:
> The cloning works by using a hot air gun and a scalpel to remove the plastic key casing and expose the NXP A700X chip, which acts as a secure element that stores the cryptographic secrets. Next, an attacker connects the chip to hardware and software that take measurements as the key is being used to authenticate on an existing account. Once the measurement-taking is finished, the attacker seals the chip in a new casing and returns it to the victim. > > Extracting and later resealing the chip takes about four hours. It takes another six hours to take measurements for each account the attacker wants to hack. In other words, the process would take 10 hours to clone the key for a single account, 16 hours to clone a key for two accounts, and 22 hours for three accounts. > > By observing the local electromagnetic radiations as the chip generates the digital signatures, the researchers exploit a side channel vulnerability in the NXP chip. The exploit allows an attacker to obtain the long-term elliptic curve digital signal algorithm private key designated for a given account. With the crypto key in hand, the attacker can then create her own key, which will work for each account she targeted.
The attack isn't free, but it's not expensive either:
> A hacker would first have to steal a target’s account password and also gain covert possession of the physical key for as many as 10 hours. The cloning also requires up to $12,000 worth of equipment and custom software, plus an advanced background in electrical engineering and cryptography. That means the key cloning -- were it ever to happen in the wild -- would likely be done only by a nation-state pursuing its highest-value targets.
That last line about "nation-state pursuing its highest-value targets" is just not true. There are many other situations where this attack is feasible.
Note that the attack isn't against the Google system specifically. It exploits a side-channel attack in the NXP chip. Which means that other systems are probably vulnerable:
> While the researchers performed their attack on the Google Titan, they believe that other hardware that uses the A700X, or chips based on the A700X, may also be vulnerable. If true, that would include Yubico’s YubiKey NEO and several 2FA keys made by Feitian.