Nvidia shares fell in premarket trading after a report said Meta is considering using Google’s TPU chips for future data centers and could lease the chips as early as next year. The news boosted Alphabet shares while stoking concerns about growing competition in the AI semiconductor space.
Google, which began producing TPUs in 2018 for internal use, now has several generations of custom AI chips that it says are more efficient for machine learning workloads. Meta’s use of TPUs would be a major win for Google and could potentially validate its technology’s capabilities.
Nvidia remains the absolute leader in the AI market with its GPUs now the backbone of the global AI infrastructure. However, the growing interest from big companies like Meta in alternatives shows the industry’s desire to diversify its chip supply and reduce its reliance on Nvidia.
Broadcom also benefited from the report, with its shares rising due to the company’s role in helping Google design the TPUs. Meta itself remains one of the biggest AI spenders with capex of up to $72 billion this year.
The news comes as the tech market grapples with falling stocks and debate over whether AI company valuations have become a bubble. Even though Nvidia just issued a strong sales forecast, selling pressure on tech stocks continues.
