Nvidia Stock Drops Amid Rising Competition in AI Chip Market

Nvidia shares fell more than 4% on Thursday, defying the broader tech sector's bullish AI spending announcements. The decline reflects mounting investor concerns over the chipmaker's dominance as major tech companies increasingly develop in-house alternatives.

Google's decision to sell its custom TPU chips externally and Amazon's rapid growth in proprietary chip development signal a shifting landscape. Meanwhile, Nvidia faces pricing pressures in China, where its B300 servers now command nearly $1 million due to tightened smuggling controls.

The four hyperscalers—Meta, Alphabet, Microsoft, and Amazon—collectively plan to allocate up to $725 billion toward AI infrastructure by 2026. While Nvidia currently captures 90% of AI accelerator demand, its position appears increasingly vulnerable as tech giants vertically integrate their chip supply chains.