Wall Street's sending a clear message to Nvidia this morning - the AI chip kingdom might not be as secure as investors thought. Shares plummeted 3.2% in premarket trading after The Information broke news that Meta is seriously considering Google's tensor processing units for its massive data center operations. It's the kind of partnership that could reshape the entire AI infrastructure landscape.
The AI chip wars just took a dramatic turn, and Nvidia's stock price is feeling the immediate impact. Shares dropped 3.2% in premarket trading Tuesday after The Information reported that Meta is actively considering a major shift to Google's tensor processing units for its data centers starting in 2027.
Meanwhile, Google's parent company Alphabet saw its shares surge 2.1% as investors quickly calculated the potential windfall. For Google, landing Meta as a TPU customer would represent the ultimate validation of its seven-year bet on custom AI chips.
The timing couldn't be more significant. Meta ranks among the world's biggest AI infrastructure spenders, with capital expenditure projected between $70 billion and $72 billion this year alone. That's the kind of customer that can make or break chip company revenues overnight.
According to The Information's reporting, the partnership discussion isn't just theoretical - Meta may start renting TPUs from Google's cloud unit as early as next year, essentially giving the chips a test run before the major 2027 deployment.
Google's TPU strategy has been quietly building momentum since the first-generation launch in 2018. Originally designed for internal use across Google's cloud computing business, the chips have evolved into serious competitors for AI workloads. The key advantage? They're custom-built for artificial intelligence tasks, potentially offering better efficiency than Nvidia's more general-purpose GPUs.
Industry experts have been saying for months that Google's TPU advantage lies in that customization. While graphics processing units became the AI standard almost by accident - they were originally designed for gaming - built its chips from the ground up for machine learning.
