Nvidia’s market value came under sharp pressure this week, with about $250 billion wiped out within hours, after new indications that Google is strengthening its challenge in the fast-growing market for artificial-intelligence processors. The sudden drop underscored how much of Nvidia’s valuation rests on expectations that it will continue to be the primary supplier of advanced AI hardware to the world’s largest technology companies.
The selloff accelerated following reports that Meta Platforms is close to committing several billion dollars to Google’s tensor processing units (TPUs) for future data-center deployments beginning around 2027. The possibility that one of the most influential AI investors could divert a notable portion of its long-term spending to Google’s homegrown chips forced traders to reassess Nvidia’s growth trajectory. At one stage, the reassessment briefly erased nearly a quarter-trillion dollars from the company’s peak valuation.
Google’s ambitions in the chip market are rising in parallel with the progress of its Gemini 3 AI model and its broader push to commercialize technology long used internally. By promoting TPUs to large cloud customers and positioning them as an alternative to GPUs, Google is signaling an intention to capture a larger portion of the economic value of AI computing, rather than allowing outside hardware vendors to dominate that opportunity.
Nvidia, in turn, issued a firm defense of its leadership. In comments posted on social media, the company congratulated Google on its recent AI advances and stressed that it continues to supply GPUs to the search giant. Nvidia framed the relationship as both collaborative and competitive, emphasizing that its latest generations of graphics processors, combined with its CUDA software ecosystem, continue to support a wide range of AI applications across cloud providers, corporate data centers, and edge-computing environments.
Analysts still view Nvidia as the clear leader in chips used to train cutting-edge AI systems, and the company maintains significant market share in that segment. Even so, the episode highlights the sensitivity of Nvidia’s valuation to shifts in customer spending plans—and how quickly sentiment can change when a company with Google’s scale signals that it intends to more aggressively pursue a larger share of the hardware that underpins the global AI surge.
