Google’s AI chip push adds more pressure on Nvidia

Google GOOG$292.10 is expanding its AI chip range, adding to competition with Nvidia NVDA$178.96 amid an investigation into CEO Jensen Huang’s personal affairs.

The double-headed wind comes as the AI trade falters, with neocloud and infrastructure stocks, including IREN IREN$21.50, Cipher Digital CIFR$6.7980, and CoreWeave (CRWV), down 70% or more from their all-time highs.

Google plans to introduce two specialized tensor processing units (TPUs) next year. One targets confidential computing for customers handling sensitive information, while the other supports applications that require larger volumes of data, including coding and drug discovery.

Bloomberg Intelligence estimates TPU sales, including related hardware and software, could exceed $135 billion by 2028, up from an estimated $12 billion this year. Its analysts say the chips cost about 30% less than Nvidia’s GPUs, potentially increasing pressure on the market leader’s pricing and market share.

Meanwhile, Nvidia lost more than $250 billion in market value on Monday after its board announced an investigation into reports that Huang had been targeted by foreign intelligence. Shares are a bit off earlier lows, down 4.3% as the broader Nasdaq surges more than 2%, including a 3.4% gain for Google.

Huang admitted an affair with a woman US officials reportedly suspect was recruited by Chinese intelligence. Independent directors and outside lawyers will oversee the inquiry.

Nvidia said it had no reason to believe national security or company secrets had been compromised. The board expressed confidence in Huang, who pledged to cooperate.