Microsoft Dominates Nvidia AI Chip Spending Amid Market Volatility

Microsoft now accounts for nearly half of Nvidia’s AI chip revenue, with 47% of its capital expenditures dedicated to the semiconductor giant’s hardware. This strategic investment represents approximately 19% of Nvidia’s total annual revenue, cementing the Windows Maker as its most important client.

Nvidia’s stock trajectory tells a contrasting story—after peaking at $153 earlier this year, shares have retreated sharply as investors grow cautious about slowing data center demand. The upcoming Q1 earnings report is expected to confirm this downward trend in AI chip spending growth.

The Magnificent Seven tech giants—Microsoft, Amazon, Meta, Tesla, Alphabet, and Google—remain the primary drivers of Nvidia’s AI semiconductor business. Their collective investments in artificial intelligence infrastructure continue to shape the trajectory of both companies, though market sentiment appears to be cooling after last year’s euphoria.