According to Fortune, Nvidia’s stock fell over 2.5% following reports that Google is actively pitching its TPU AI chips to outside companies including Meta and major financial institutions. The catalyst was a report from The Information revealing Google’s push to expand TPU usage beyond its cloud service into customers’ own data centers. This prompted Nvidia to post a defensive message on X, stating “NVIDIA is a generation ahead of the industry” while acknowledging Google’s AI advances. Meanwhile, Alphabet shares climbed for a third consecutive day as its Gemini 3 model received strong reviews from tech leaders like Salesforce CEO Marc Benioff. The stock movement and Nvidia’s public response highlight growing competitive tensions in the AI chip market.
Nvidia’s defensive moment
Here’s the thing about Nvidia’s response – it’s not something we typically see from the dominant player. When you’re sitting on 90%+ market share in AI accelerators, you don’t usually bother responding to competitive moves publicly. But Google‘s TPU push seems to have hit a nerve. The fact that Google trained its well-reviewed Gemini 3 model entirely on TPUs is a massive statement. It basically says “we don’t need your GPUs for our most important work.” And when you combine that with reports that Google is now shopping these chips to Meta and financial institutions? That’s when Wall Street starts paying attention. Nvidia’s X post reads like someone trying to reassure everyone they’re still in control while secretly wondering if the ground is shifting beneath them.
The architecture war
Nvidia made sure to highlight the fundamental difference in their approach. Their GPUs are general-purpose workhorses that can handle any AI model across cloud, on-premise, and edge environments. Google’s TPUs are ASICs – custom chips optimized for specific workloads. Nvidia’s argument is about versatility versus specialization. But here’s the question: what if most companies don’t need that versatility? What if they just want the most efficient chips for training and running large language models? Google’s success with Gemini 3 suggests that for many AI workloads, specialized chips might be good enough. And when you’re talking about the massive compute requirements of modern AI, “good enough” at potentially lower cost becomes very compelling. This is exactly the kind of challenge that could disrupt even the most entrenched market leader.
Beyond Google: The Burry factor
Nvidia isn’t just fighting Google – they’re also quietly battling Michael Burry, the investor famous for predicting the 2008 housing crash. Burry has been comparing today’s AI boom to the dot-com bubble and calling Nvidia the “Cisco of this cycle.” His argument is that while Nvidia supplies the hardware for the AI buildout, it could suffer the same fate Cisco did when the telecom bubble burst. Nvidia’s response? A seven-page memo to Wall Street analysts specifically rebutting Burry’s claims about excessive stock compensation, inflated depreciation schedules, and “circular financing” in the AI startup ecosystem. The fact that Nvidia felt the need to circulate such a detailed rebuttal tells you they’re taking these criticisms seriously. It’s one thing to compete with Google on technology – it’s another to have your fundamental business model questioned by someone with Burry’s track record.
What this means for the industry
We’re witnessing the beginning of a real challenge to Nvidia’s dominance, and it’s coming from multiple directions. Google’s TPU success shows that custom silicon can compete at the highest levels of AI performance. Meanwhile, the broader market is starting to ask harder questions about whether the AI boom is sustainable. For companies building out their AI infrastructure, this competition could eventually lead to more options and better pricing. But here’s the reality: Nvidia still has massive advantages in software ecosystems, developer tools, and market presence. Their CUDA platform is deeply embedded across the industry. Still, when the 800-pound gorilla starts posting defensive messages on social media and circulating rebuttals to critics, you know something interesting is happening. The AI chip war just got a lot more interesting.
