Nvidia Vulnerable To In-House AI Chip Production By Google, Meta, Microsoft, Amazon

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  • Despite Nvidia Corp's NVDA AI moat, companies developing their AI models are migrating towards custom chips to curtail costs and tackle compatibility issues and supply crises.
  • Alphabet Inc GOOG GOOGL Google is on its fourth iteration of its in-house Tensor Processing Unit (TPU). 
  • Meta Platforms, Inc's META inaugural custom AI chip, Meta Training Inference Accelerator (MTIA), will likely go live in 2025. 
  • Microsoft Corp MSFT has also jumped into the AI hardware bandwagon, Digitimes reports
  • Amazon.Com, Inc AMZN, though, with its duo of chips - Inferentia and Trainium - under its belt, has determined that software development will remain its primary focus.
  • The decision of cloud providers to remain in charge will fuel alliances and revenue prospects for teams specializing in designing application-specific integrated circuits (ASICs), posing a headwind for chipmakers like Nvidia.
  • Microsoft will likely bolster its strategic partnership with Advanced Micro Devices, Inc AMD. Meta is extending its chip technology collaboration with Broadcom Inc AVGO on AI and metaverse. Taiwan-based IP and ASIC powerhouses like MediaTek, Global Unichip, and Alchip Technologies are likely contenders for a stake in the AI and high-performance computing (HPC) realm.
  • Price Action: NVDA shares traded lower by 0.82% at $397.86 on the last check Wednesday.
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