Nvidia shares tumbled as much as 6.5% Tuesday morning when word leaked that Google—long a loyal renter of Nvidia GPUs—might start selling its home-grown AI chips to anyone with a spare billion dollars and a data center.
The culprit was a Monday report from The Information stating Google is in advanced talks with Meta to supply the Facebook parent with tens of billions of dollars worth of tensor processing units (TPUs) beginning in 2027.
For years Google has quietly kept its TPUs behind the velvet rope of Google Cloud, letting outsiders rent time on them the way one rents a Lamborghini for prom night. Now, apparently, Google has decided the cool kids should be allowed to buy the car outright.
The same report claims Google is shopping TPUs to its other cloud customers and believes the move could eventually siphon off roughly 10% of Nvidia’s yearly revenue. Wall Street responded with the calm, measured grace of a toddler denied ice cream.
Advanced Micro Devices, never one to miss a sale on someone else’s bad news, promptly fell more than 8%. Solidarity, apparently, is very much alive in the chip business.
The broader backdrop is that Nvidia’s best customers have been quietly sharpening knives in the kitchen while still asking for seconds at the dinner table. Amazon already rented half a million of its custom Trainium chips to Anthropic, a company that somehow keeps collecting money from everyone at once.
Microsoft, not to be left out of the DIY chip party, has its own accelerators humming away. Even OpenAI reportedly kicked the tires on Google’s TPUs over the summer, presumably while wearing a very expensive disguise.
Investors, who only last week were convinced the AI bubble had merely paused for breath, suddenly remembered gravity still works. Nvidia’s brief Monday rebound evaporated faster than free samples at a Costco on Saturday.
The drama has been building for months. In September, DA Davidson floated the idea that Google’s TPU business plus DeepMind could one day be worth $900 billion—roughly the GDP of a medium-sized continent.
Nvidia, sensing the room turning chilly, circulated a weekend memo insisting everything is fine and that its investments in customers are perfectly normal, thank you very much. The company took particular umbrage at being compared to Enron, WorldCom, or Lucent, pointing out that its financials are transparent and it still has a reputation to protect.
Critics remain unconvinced, with Michael Burry—the “Big Short” guy who once made a fortune betting against housing—quietly wagering Nvidia is the latest bubble with fabulous PowerPoint slides.
For now, Nvidia shareholders are left contemplating the ultimate Silicon Valley paradox: the better you serve your customers, the faster they learn to live without you. Google, meanwhile, appears ready to graduate from enthusiastic tenant to full-blown landlord.
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