It’s increasingly looking like Nvidia isn’t the only game in town when it comes to AI-enabling hardware.
Nvidia stock dropped on Tuesday as investors took in a report that Meta could buy billions worth of Google’s AI chips in the coming years. The Facebook parent is currently one of Nvidia’s biggest chip customers.
Nvidia, the biggest company in the world by market cap, saw shares fall as much as 5% after rising 2% in Monday’s session. Alphabet stock jumped 4%.
The Information reported that Meta could incorporate Google’s tensor processing units in its data centers several years from now, and could start renting TPUs from the company as soon as next year.
Meta, one of the most voracious spenders in the AI trade, has said it could spend as much as $72 billion on capital expenditures next year, much of which is expected to be invested in AI infrastructure.
“Google Cloud is experiencing accelerating demand for both our custom TPUs and NVIDIA GPUs; we are committed to supporting both, as we have for years,” an Alphabet spokesperson told Business Insider.
Meta and Nvidia did not immediately respond to a request for comment sent by Business Insider.
Semiconductor stocks were broadly in the red on Tuesday, with the exception of Broadcom, which helps Google design and manufacture its chips. Broadcom stock jumped 11% on Monday as investors piled in as another way to bet on Google’s growing dominance in the AI arms race.
Here were the other big moves in the tech sector:
It’s been a choppy few weeks for the AI sector, but specifically for Nvidia. Shares of the GPU producer initially popped after it reported stellar earnings for the third quarter, but then started to drop as fears of an AI bubble crept back into the picture.
The company has also been defending itself against criticisms from “The Big Short” investor Michael Burry, who has sounded the alarm for a stock market bubble in recent weeks.
Nvidia shares are down 12% from their peak in late October. The stock is still up 32% year-to-date.
Alphabet, on the other hand, has been on a tear as the company gains dominance in the AI trade. Shares have rallied 18% over the past month and are up 67% in 2025.
“Alphabet is the only large player trading in positive territory this morning. It’s fair to say that investors seem quite nervous currently,” David Morrison, a senior market analyst at Trade Nation, wrote in a note of the recent volatility in the tech sector.