Nvidia hit after report Meta may spend billions on Google AI chips
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The news: Nvidia shares slid as much as 7% on Tuesday in New York following a report from The Information that Meta is in discussions to spend billions of dollars on Google’s AI chips.
The talks would be a shift in Google’s TPU strategy, which until now has centred on renting its AI chips to customers (as well as Nvidia GPUs) for use exclusively within Google Cloud data centres, rather than offering them for deployment in external data centres.
What they said: The report said Meta is considering using the chips in its data centres in 2027 and renting them next year. Meta has not commented on the report.
Google did not comment on the specific plans but said its cloud business is experiencing accelerating demand for both its custom TPUs and Nvidia GPUs, and that it remains committed to “supporting both.”
The numbers: According to the report, Google is also pitching TPUs to other cloud customers, including financial firms, for on-premise use.
“Some” leaders of the Google Cloud unit have suggested that could help it capture up to 10% of Nvidia’s annual revenue, The Information reported citing an unnamed person who had heard the remarks.
Shares of Alphabet rose as much as 3.22%, bringing its valuation close to USD4 trillion. In contrast, Nvidia’s shares fell 7.12% to USD169.55 each, before paring back some losses by noon. Shares of AMD also dropped as much as 9.66%.
The sources: The Information, Bloomberg
