Nvidia Vulnerable To In-House AI Chip Production By Google, Meta, Microsoft, Amazon
Despite Nvidia Corp's (NASDAQ: NVDA) AI moat, companies developing their AI models are migrating towards custom chips to curtail costs and tackle compatibility issues and supply crises.
Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) Google is on its fourth iteration of its in-house Tensor Processing Unit (TPU).
Meta Platforms, Inc's (NASDAQ: META) inaugural custom AI chip, Meta Training Inference Accelerator (MTIA), will likely go live in 2025.
Microsoft Corp (NASDAQ: MSFT) has also jumped into the AI hardware bandwagon, Digitimes reports.
Amazon.Com, Inc (NASDAQ: AMZN), though, with its duo of chips - Inferentia and Trainium - under its belt, has determined that software development will remain its primary focus.
The decision of cloud providers to remain in charge will fuel alliances and revenue prospects for teams specializing in designing application-specific integrated circuits (ASICs), posing a headwind for chipmakers like Nvidia.
Microsoft will likely bolster its strategic partnership with Advanced Micro Devices, Inc (NASDAQ: AMD). Meta is extending its chip technology collaboration with Broadcom Inc (NASDAQ: AVGO) on AI and metaverse. Taiwan-based IP and ASIC powerhouses like MediaTek, Global Unichip, and Alchip Technologies are likely contenders for a stake in the AI and high-performance computing (HPC) realm.
Price Action: NVDA shares traded lower by 0.82% at $397.86 on the last check Wednesday.
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