Google TPUs Threaten Nvidia’s Dominance? Analyst Slams ‘Zero-Sum Stupidity’ As AI Infra Market Runs Red Hot

• Analysts say Google’s TPUs may not pose a significant threat to Nvidia’s AI chips.
• Cathie Wood’s Ark Invest on Tuesday picked up GOOG stock worth over $56 million.
• Alphabet stock has embarked on a breathtaking rally, gaining 15% so far in November and 71% year-to-date, while Nvidia is down 12% in November.

Nvidia Corp.’s (NVDA) stock fell 2.59% on Tuesday, defying the gains of the broader market and the tech sector, dragged by rumors of Alphabet, Inc. (GOOGL) (GOOG) posing a threat to its artificial intelligence (AI) chip dominance. Nvidia downplayed the Alphabet threat, while a Google executive and strategists suggest that the AI chip market may not be a “zero-sum game.”

Tuesday’s dip in Nvidia stock came even as Alphabet stock rallied over 1.50% to a fresh high.

Market Clueless

In a post on X, Google DeepMind research scientist Amir Yazdan said, “The selloff shows how clueless the market is about hardware and the demand.” He has been with Google since mid-2018, according to his LinkedIn profile.

In the thread, he said AI demand is incredibly high. He, however, clarified that he did not design Google’s AI chips, known as Tensor Processing Units (TPUs).

Through a post on Nvidia Newsroom's X handle, the Jensen Huang-led company rubbished talks of Alphabet upsetting its AI chip apple cart. While lauding Alphabet for its success with AI, Nvidia continues to supply to Google. “NVIDIA is a generation ahead of the industry — it’s the only platform that runs every AI model and does it everywhere computing is done,” it said.

The Nvidia AI chip vs. Google TPU debate was sparked by an Information report that said Meta and other companies were evaluating the latter for use in their data centers. Alphabet previously deployed TPUs for in-house use and also rented them to companies running large-scale AI workloads in its own cloud data centers.

Analysts Weigh In

Bank of America’s Vivek Arya delved into the issue last Friday, arguing that Alphabet’s custom TPU chip may not pose a significant competitive threat to Nvidia, according to Investing.com. The analyst said Nvidia’s AI chips are “ubiquitous/available in every cloud and involved in almost every other LLM” and offer “the fastest time-to-market and best performance/watt.”

The Future Fund’s Gary Black sees a potential deal between Google and Meta that would help establish TPUs as an alternative to Nvidia’s chips, the gold standard for big tech firms and startups from Meta to OpenAI that need computing power to develop and run AI platforms.  He noted that Google announced last month a deal to supply up to one million of its chips to Anthropic PBC, drawing attention to the potential for long-term challenges to Nvidia’s dominant market position.

Futurum Group’s Daniel Newman said, “The zero-sum stupidity has found its peak with this GPU/TPU nonsense. The market will literally be in the trillions for AI infrastructure, and $GOOGL $NVDA $AMD can all do well.” He also expects other names, such as Amazon and Qualcomm, to generate billions in revenue from AI Chips due to the massive scale of the opportunity. This is in contrast to the rumored view of Google executives that TPU usage would cause a 10% dent in Nvidia’s annual revenue.

Meanwhile, Alphabet’s stock has embarked on a breathtaking rally, gaining 15% so far in November and 71% year-to-date. It is now the best-performing “Magnificent Seven” stock of 2025. In comparison, Nvidia has shed 12% this month, reducing its YTD gains to 32%, dented by AI bubble fears, questions raised regarding the company’s accounting practices and AI chip competition fears.

Cathie Wood’s Ark Invest, which usually picks up portfolio stocks on dips, bought 174,293 Class C shares of Alphabet on its upside on Tuesday, valued at $56.41 million based on Tuesday’s closing price. The firm, however, sold about $22 million worth of AMD shares.

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