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Nvidia shares could face significant pressure when markets open, following a report by The Information that
Meta is considering switching to Google-developed chips.
Nvidia stock is poised to open down 3.2%, while shares of Google’s parent company, Alphabet, could climb 2.1%, according to early market data.
The Information reported Monday that Meta is evaluating the deployment of Google’s Tensor Processing Units (TPUs) in its data centers as early as 2027. The social media giant could also begin leasing TPUs from Google Cloud as soon as next year.
Google first unveiled its first-generation TPU chip in 2018, initially designed for its own cloud computing operations. Since then, the company has released increasingly advanced versions specifically engineered to handle artificial intelligence workloads.
TPUs are custom-designed chips, and experts believe this gives Google a competitive advantage by offering a highly efficient product for AI applications. If Meta were to adopt these chips, it would represent a substantial win for Google.
Nvidia remains the market leader in graphics processing units (GPUs), which are fundamental hardware components for building large-scale AI infrastructure. While Nvidia’s dominance is unlikely to be challenged in the short term, Google’s TPUs represent growing competition in the AI semiconductor market.
Companies building AI infrastructure have long sought more diversified sources for chips to reduce their reliance on Nvidia. Meta is one of the largest investors in AI infrastructure, forecasting capital expenditures between $70 billion and $72 billion this year.
The featured image is an illustration. Image source: Portfolio
This writing does not constitute investment advice or an investment recommendation. Detailed legal information