Nvidia’s stock suffered after a recent report mentioned an AI chip deal between tech giants Google and Meta. Nvidia, now one of the leading AI chip makers, could reportedly soon see its own customer, Google, become a competitor.
Let’s take a closer look at the details of the reported deal and what it means for these tech giants and their future in AI.
Nvidia stock faces blow after Meta-Google reports
As per a report from The Information, Google is in talks with Meta for the Facebook parent company to spend billions on their TPUs. While Meta’s AI developers already use these chips through Google Cloud, the TPUs still belong to Google, confined within Google’s own data centers. However, after the reported deal, Meta may use Google’s TPUs housed in its own data centers. Following this report, the Nvidia (NVDA) stock fell 2.6% on Tuesday.
Meanwhile, Nvidia’s rival AMD’s stock price also dropped by over 4% following the report. While Nvidia and AMD focus on GPUs, Google’s TPUs function differently and may not pose as significant a threat to Nvidia’s stock price. TPUs are ASICs, meaning they cannot be used in the same versatile way as GPUs. So, although the deal might appear to give Google and Meta an edge in advancing AI, the reality may be more limited.
Companies like Amazon and Microsoft also have their own AI chips. Amazon reportedly completed a massive data center project a month ago and said that the AI safety and research company Anthropic will use 1 million of its chips by the end of 2025. However, the company earlier announced its expanded use of Google’s TPUs as it continues to push the boundaries of AI research and product development. In the rat race of AI chips, Amazon and Google’s ever‑expanding partnerships with AI firms are constantly putting pressure on Nvidia, which currently maintains the largest dominance in the AI chip market.
Originally reported by Elton Fernandes on Mandatory.
