Nvidia stock slipped about 4% on Tuesday after a new report claimed Meta is considering a massive shift in its chip spending — potentially pouring billions of dollars into Google’s AI chips instead of Nvidia’s.
According to The Information, Meta is in discussions to start using Google’s custom tensor processing units (TPUs) inside its data centers beginning in 2027. A person directly involved in the talks said the deal would involve billions in chip purchases.
The report also notes Meta is considering renting Google’s chips from Google Cloud as early as next year, signaling a broader move toward diversifying its AI chip suppliers.
Currently, Meta relies heavily on Nvidia’s powerful graphics processing units (GPUs) to train and run its AI models across Facebook, Instagram and WhatsApp.
If the deal goes through, Google could capture up to 10% of Nvidia’s annual revenue, according to a person who heard internal remarks cited by The Information. That potential loss of business appears to be one major reason Nvidia’s shares reacted sharply to the report.
Neither Meta nor Google has publicly commented on the negotiations, but the talks highlight the rising competition in the AI chip race as tech giants look for alternatives to Nvidia’s increasingly expensive and high-demand hardware.
