NVIDIA stock in danger? Alphabet is apparently planning a new generation of its own AI chips

• Google attacks NVIDIA with new AI chips, according to report
• TPUs are becoming serious competition
• NVIDIA’s market leadership in danger?

Competition in the market for artificial intelligence is heating up – and poses a central question to investors: Will NVIDIA remain the undisputed champion of AI chips or could Alphabet pose a serious threat to the top dog? Current developments suggest that the balance of power could be shifting.

Alphabet’s attack: New AI chips put NVIDIA shares under pressure

As Bloomberg previously reported, Alphabet presented a new generation of its own AI chips – so-called Tensor Processing Units (TPUs) – at the “Google Cloud Next” conference. These processors, developed specifically for AI applications, are already considered the strongest internal alternative to NVIDIA’s graphics processing units (GPUs).

The stock market reacted promptly: After the information was announced on April 21, NVIDIA shares ultimately fell by 1.08 percent to $199.88 on the NASDAQ, after previously gaining.

NVIDIA remains dominant – but for how long?

Despite the increasing competition, analysts have so far remained calm. During a discussion at the UBS Global Technology and AI Conference in December 2025, NVIDIA managers themselves emphasized that the threat from Google was limited. The next hardware generation “Vera Rubin” should also remain at the forefront of technology.

“With significant barriers to entry created by its CUDA software stack, we see limited competitive risks and expect NVIDIA to continue to dominate one of the fastest-growing workloads in cloud and enterprise,” KeyBanc analyst John Vinh said in a note, according to Barron’s. NVIDIA’s CUDA ecosystem is considered a key competitive advantage because it offers developers an established platform for AI applications.

Why investors should take a closer look now

Nevertheless, the market could change in the long term. Google is increasingly relying on vertical integration – i.e. the combination of its own hardware, software and cloud infrastructure. This could be particularly attractive for large cloud providers.

“We believe many investors underestimate that GPUs are often the lowest-risk hardware investment for cloud providers – particularly for any entity that will ultimately serve external customer workloads,” UBS analyst Timothy Arcuri makes a key point, according to Barron’s.

At the same time, it puts NVIDIA’s often-vaunted competitive advantage into perspective. “NVIDIA’s CUDA ecosystem is not a strong moat in every case, but NVIDIA’s ability to model, simulate and benchmark alternative architectures internally is a factor that we believe many investors underestimate,” he is further quoted by Barron’s.

NVIDIA and Google shares in upheaval: turning point in the AI ​​chip market?

The competition between NVIDIA and Google marks a crucial phase in the AI ​​boom. While NVIDIA currently continues to dominate, Google’s chip offensive could potentially lead to more competition in the medium term.

The coming quarterly figures from the big tech companies could be pointers for investors. The decisive factor will be whether leading AI models will continue to run primarily on NVIDIA hardware in the future – or whether Google will gain more market share with its TPUs.

Bettina Schneider, editorial team at finanzen.net

This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.

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