Nvidia Faces $180 Billion Market Value Hit as Meta Explores Google-Made AI Chips

Nvidia is bracing for a massive market value drop of nearly $180 billion after fresh reports revealed that Meta Platforms is considering shifting toward Google-designed chips for its future AI infrastructure. The development has shaken investor confidence, signalling a potential reshaping of the AI hardware race.

According to The Information, Meta is evaluating Google’s custom Tensor Processing Units (TPUs) for deployment in its data centers beginning in 2027. The social media giant is also exploring the option of renting TPUs through Google Cloud as early as next year, a move that could reduce its dependence on Nvidia’s GPUs.

The report triggered an immediate market reaction. Nvidia shares fell 4.1% in premarket trading, putting the chipmaker on track for a steep valuation loss. Meanwhile, Alphabet — Google’s parent company — surged nearly 4%, inching closer to the coveted $4 trillion market cap milestone.

Google introduced its first TPU in 2018 and has since developed multiple generations optimised for large-scale AI workloads. Industry analysts say TPUs offer higher efficiency for specific machine learning tasks compared to traditional GPUs, giving Google a competitive edge.

If Meta finalises this shift, it would represent a major endorsement of Google’s hardware and a rare instance of a major AI player leaning on a chip supplier other than Nvidia. The ripple effect extended across the sector, with Broadcom also gaining momentum — its stock rising over 11% yesterday and another 2.5% today, given its role in AI infrastructure manufacturing.

The potential realignment underscores intensifying competition in the AI chip space as tech giants race to power ever-growing artificial intelligence models.