Nvidia Shares Hit After Reports Of Meta In Talks To Buy Google AI Chips

(RTTNews) - AI chip major Nvidia Corp.'s shares were losing around 3.4% in pre-market activity on the Nasdaq following a report that Meta Platforms Inc., which mainly uses Nvidia graphic processing units or GPUs for its AI needs, is in talks with Google for using its custom AI chips for data centers.

On the other hand, shares of Google's owner Alphabet Inc. were gaining around 2.7 percent.

The Information reported, citing a person familiar with the talks, that Meta is in discussions with Google for buying billions of dollars worth AI chips, which are known as tensor processing units or TPUs, for use in data centers starting in 2027. Meta also may rent TPU capacity from Google Cloud as early as 2026.

As of now, Nvidia's AI chips are widely used by tech majors, and it is expected that a possible agreement between Meta and Google would help establish TPUs as an alternative to Nvidia's chips. The H200 chip is among Nvidia's most powerful, featuring more high bandwidth memory than the previous H100.

Google so far has used its customer TPUs to its own data centers, and rents them out to customers. Google is now offering to sell TPUs for use in customers' own data centers.

Google already has signed a deal to supply up to 1 million of its chips to Anthropic PBC.

Google was reported to have said recently that it is required to double computing capacity every six months to keep up with the skyrocketing demand for AI. During an all-hands meeting, Google Cloud VP Amin Vahdat last week mentioned that the focus isn't on outspending competitors but rather on providing faster, more dependable, and efficient infrastructure. CEO Sundar Pichai also stressed that 2026 is going to be a challenging year as competition gets fiercer, emphasizing that it's riskier to underinvest than to keep pushing forward.

On the Nasdaq, NVIDIA shares closed Monday's regular trading at $182.55, up 2.05 percent. In the pre-market activity, the shares were losing around 3.4 percent to trade at $176.35.

Alphabet shares, which closed Monday's trading 6.3 percent higher, is currently gaining 2.3 percent further in the pre-market, to trade at $325.74.