Have a good weekend, investors. How do you feel about the dependence of tech giants like $MSFT-0.8% $GOOGL+0.7% $AMZN-1.7% on artificial intelligence chips from $NVDA-2.2%?
These tech giants are progressing in developing their own chips for their data centers with AI deployment. An important example is $MSFT-0.8% 's recent investment in d-Matrix, a company that designs optimized chips to power generative AI applications. Chips that are designed specifically for the customer's needs have lower power consumption, which is a major factor in data centres as they run 24/7.
This is where I see a big risk for $NVDA-2.2%, a company that makes "general purpose" chips for AI. $AMZN-1.7% and $GOOGL+0.7% are already developing their own chips for their own needs , I think they will not depend on $NVDA-2.2% chips at all in the future.
This to me is one of the risks Nvidia may run into that may affect future growth.
It's very possible that the tech companies will make the chips themselves and won't be so dependent on Nvidia.
https://www.cnbc.com/2023/09/11/sundar-pichai-says-google-and-nvidia-will-still-be-working-together-10-years-from-now.html
As long as $NVDA-2.2% is American, it's fine :)
I think these companies have looked up to Apple and are trying to emulate it... it's just going to take a lot of time and the outcome is highly uncertain...
It probably won't be that simple, NVidia probably holds enough patents that it won't be easy to get around. Another question is if those companies are even an interesting customer for TSMC. According to the last call AI chips only make about 6% of their revenue, if every one of those big customers wanted to make a move they might not have such good delivery terms.