Nvidia is experiencing potential margin pressure as major tech firms like Google, Amazon, Meta, and OpenAI develop their own AI chips, aiming to reduce dependency on Nvidia's GPUs. These custom chips are designed to be more cost-effective and better integrated with internal software, potentially diverting a significant portion of AI compute demand away from Nvidia.
Analysts predict that by 2028, these companies could control 45% of the AI-chip market, up from 37% in 2024. Despite this competitive threat, Nvidia remains focused on its comprehensive AI infrastructure, which includes hardware, software, and orchestration tools, to sustain its market position.
Nvidia Faces Margin Pressure as Big Tech Develops Custom AI Chips
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