This article first appeared on GuruFocus.

Nvidia (NASDAQ:NVDA) walked into a surprise headwind after a report suggested Meta (NASDAQ:META) is weighing billions in spending on Google’s (NASDAQ:GOOG) tensor processing units starting in 2027, with chip rentals from Google Cloud possibly beginning next year. That single detail was enough to knock Nvidia in premarket trading and send Alphabet higher, feeding into the wave of optimism already building around the newest Gemini model. The ripple effect went global: Alphabet-linked suppliers in Asia popped, with South Korea’s IsuPetasys hitting an intraday record and Taiwan’s MediaTek climbing sharply. For a market that has treated Nvidia accelerators as the indispensable oxygen of AI development, the idea of Meta broadening its hardware pipeline could be a notable signal.

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For Google, the timing could be auspicious. The company has already agreed to supply up to 1 million TPUs to Anthropic, a milestone that Seaport’s Jay Goldberg described as a really powerful validation of the architecture. Bloomberg Intelligence analysts said Meta’s potential move fits a pattern where large-model developers lean on Google as a secondary supplier for inferencing, noting that Meta’s capital spending plans imply tens of billions flowing into inferencing-chip capacity next year. They added that such demand could possibly accelerate consumption and backlog growth inside Google Cloud, especially among enterprises wanting access to TPUs and Gemini side by side.

The strategic divide in AI hardware is becoming a storyline of its own. Nvidia’s GPUs, originally engineered for graphics, turned out to be extremely effective at training large models because they process massive data loads and complex computations. Google’s TPUs took the opposite path: built more than a decade ago for AI workloads, refined continuously through internal feedback loops with DeepMind, and pushed further with the Ironwood generation introduced in 2025. That design philosophy, combined with growing concern among global tech companies about dependence on a single supplier, could be one reason TPUs are gaining momentum at a moment when every hyperscaler is rethinking how much of its future should be tied to Nvidia alone.