Google is reportedly in talks to sell billions of dollars’ worth of its custom artificial intelligence chips to Meta Platforms, a potential deal that sent ripples through the stock market. News of the talks caused the Nvidia stock price to dip while boosting the Google stock price, as investors began to reconsider the competitive balance in the high-stakes market for AI computing power.
Meta is considering using Google’s Tensor Processing Units (TPUs) in its own data centers starting in 2027. This development is significant because it suggests a major tech company is looking for a serious alternative to Nvidia, and it could have a long-term impact on the Meta stock price as the company diversifies its suppliers for critical components.
A new challenge and its impact on the Nvidia stock price
For years, Nvidia has been the undisputed leader in chips designed for artificial intelligence. Its powerful processors have been essential for nearly every major company, from Meta to OpenAI, for developing and running complex AI systems. This near-monopoly has been a primary reason for the incredible growth in the Nvidia stock price.
However, Google’s potential deal with Meta signals that its custom-built TPUs are emerging as a credible and powerful alternative. This isn’t the first time Google has attracted a major AI player; the company previously secured a deal to supply up to 1 million of its TPUs to Anthropic. A partnership with a giant like Meta, however, would be a much bigger validation.
The market reacted swiftly to the news.
The Nvidia stock price fell by as much as 3% in premarket trading, a clear sign of investor concern. In contrast, shares of Google’s parent company, Alphabet, gained 2.4%, building on recent optimism around its latest Gemini 3 Pro AI model.
What does this mean for the Google stock price and the Meta stock price
For Google, this is about more than just a single sale; it’s a chance to finally monetize a decade-long investment in custom chip design. Successfully supplying a customer the size of Meta would not only bring in billions in revenue but also prove that its TPUs can compete with Nvidia’s best on both performance and efficiency. This potential for a huge new revenue stream is a significant factor supporting the recent rise in the Google stock price.
For Meta, the deal is a smart and strategic move.
The company plans to spend at least $100 billion on its data centers in 2026, and relying almost entirely on a single supplier for the most critical hardware creates a major business risk. By bringing in Google’s TPUs, Meta can reduce this risk, increase its negotiating power, and potentially lower its long-term costs. This kind of prudent supply chain management could positively influence the long-term outlook for the Meta stock price.
The playing field for AI chips is changing
For some time, companies around the world have been worried about their overreliance on Nvidia. While Nvidia’s processors were originally designed for graphics, they turned out to be perfect for training AI systems. Google’s TPUs, on the other hand, were designed from the very beginning with only artificial intelligence in mind.
The potential deal between Google and Meta is a clear sign that the market for AI chips is becoming more competitive. While the Nvidia stock price has long reflected a dominant market position, the emergence of powerful alternatives means the race is far from over. Investors will be watching closely, as the battle to supply the computing power for the next generation of technology will have a lasting impact on the stock prices of all the major companies involved.
