Nvidia Sells Off as Meta–Google Chip Talks Underscore Rising Competitive Threat
Mondeum Capital (UK) Limited
Nvidia Corp. slumped Tuesday after reports that Meta Platforms Inc. is in discussions to buy artificial-intelligence chips from Alphabet Inc., a development that sharpened investor anxiety over the durability of Nvidia’s dominance in the data-center AI market.
Shares of the world’s most valuable chipmaker fell 6.6%, erasing about $294 billion in market value — one of the biggest single-day losses for a U.S. company, according to Dow Jones Market Data. Alphabet gained 2.9%, putting the stock within reach of an all-time high.
The moves followed reports that Meta is considering deploying Google’s tensor processing units, or TPUs, in its data centers by 2027. The in-house Google chips are designed to train and run AI models at lower cost and with less energy than Nvidia’s flagship graphics processors, potentially giving large cloud providers and consumer-internet platforms another lever as they weigh soaring AI-infrastructure bills.
The prospect of a major customer exploring alternatives was enough to rattle broader semiconductor names. Advanced Micro Devices dropped 8.4%, while Broadcom slipped 0.3%.
Still, some on Wall Street framed the selloff as an opening. Bernstein analyst Stacy Rasgon said the pullback has made valuations for Nvidia and Broadcom more compelling, arguing that the long-term demand trajectory for AI compute remains intact even as competitive narratives shift.
The Meta–Google talks underscore a growing reality for investors: Nvidia’s grip on the AI hardware stack is formidable, but its biggest customers are increasingly motivated to diversify.
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