It’s starting to look like Nvidia isn’t the only game in the game when it comes to AI-enabled hardware.
Nvidia stock fell on Tuesday as investors took in reports that Meta Inc. could buy Google’s AI chips worth billions of dollars in the future. Facebook’s parent company is currently one of Nvidia’s biggest chip customers.
Shares of Nvidia, the world’s largest company by market capitalization, fell 6% in Monday trading after rising 2%. Alphabet stock rose as much as 4%.
But Nvidia wasn’t the only chipmaker to suffer significant losses. AMD fell as much as 10%, Intel shares fell 1%, and Micron Technology and Taiwan Semiconductor Manufacturing Co. each fell 3%. Losses in top chip stocks caused the Nasdaq to rebound slightly after falling 1% early in the session.
Here are the U.S. indices as of 3:05pm ET on Tuesday:
The Information reported that Meta may incorporate Google’s tensor processing units into its data centers in the coming years, and could start renting TPUs from the company as early as next year.
Meta, one of the AI industry’s most voracious spenders, has said it could spend up to $72 billion in capital spending next year, much of which is expected to go into AI infrastructure.
“Google Cloud is seeing accelerating demand for both custom TPUs and NVIDIA GPUs, and we remain committed to supporting both, as we have for years,” an Alphabet spokesperson told Business Insider.
“We’re pleased with Google’s success. Google is making great strides in AI, and we continue to supply them. NVIDIA is a generation ahead of the industry,” an Nvidia spokesperson told BI, adding that the company believes its chips will perform better than ASICs (a type of AI chip that includes Alphabet’s TPUs).
Meta did not immediately respond to Business Insider’s request for comment.
Semiconductor stocks were mostly in the red on Tuesday, except for Broadcom, which helps Google design and manufacture chips. Broadcom shares rose 11% on Monday as investors rushed in for another way to bet on Google’s growing dominance in the AI arms race.
It’s been an eventful few weeks for the AI sector, especially for Nvidia. The GPU maker’s stock initially soared after reporting impressive third-quarter profits, but then began to fall as concerns about an AI bubble resurfaced.
The company is also shielding itself from criticism from The Big Short investor Michael Burry, who has warned of a stock market bubble in recent weeks.
Nvidia stock is down 12% from its high in late October. The stock price has increased 32% since the beginning of the year.
Meanwhile, Alphabet has struggled as it gains dominance in the AI industry. The stock has risen 18% in the past month and is expected to rise 67% in 2025.
“Alphabet is the only major company trading in positive territory this morning, so it’s safe to say that investors seem pretty nervous right now,” David Morrison, senior market analyst at Trade Nation, said in a note about recent volatility in the tech sector.
