Market Reacts to Growing Competition Among
Tech Giants in AI Chip Supply
Shares of Nvidia dropped by 3% following news that Meta Platforms plans to use artificial intelligence chips supplied by Google , intensifying competitive pressures in the AI hardware market.
Nvidia, a leading provider of AI processors, had enjoyed a strong position in supplying chips to top tech companies. However, Meta’s decision to diversify its AI chip suppliers to include Google threatens Nvidia’s market share.
Meta intends to use Google’s latest generation TPU (Tensor Processing Unit) chips for some of its AI workloads, supplementing or replacing Nvidia GPUs, in a strategic move to optimize performance and supply-chain flexibility.
The announcement triggered a sell-off among investors concerned about Nvidia’s revenue growth prospects given the shift in customer demand and broader sector volatility.
The semiconductor sector overall experienced pressure, with related companies also seeing declines amid investor uncertainty about upcoming interest rate moves and changing capital expenditure priorities on AI infrastructure.
Analysts note that while Nvidia remains dominant in many AI applications, increasing competition from Google’s cloud division and other chipmakers could challenge the company’s near-term sales momentum.
Meta’s use of Google chips may also accelerate the trend toward specialized AI hardware, reducing dependence on any single vendor.
Despite the share price dip, many market watchers maintain a positive long-term outlook for Nvidia due to its broad AI ecosystem and technological leadership.
