By Keithen Drury, The Motley Fool
Publication Date: 2026-05-08 00:53:00
A few years ago, the primary argument in the AI computing space was whether Nvidia (NASDAQ: NVDA) could maintain its dominance or whether a competitor like AMD could rise to steal market share. For the most part, Nvidia has maintained its dominance and has grown to own a far larger corner of the market than AMD. That argument has faded a bit, and a new one has emerged: custom AI chips.
This debate is very different from Nvidia versus AMD. While these two make graphics processing units (GPUs) that essentially function in the same way, these custom AI chips are built with one purpose in mind. This single-task focus leads to better cost-effectiveness when training and running AI models versus GPU-based training, which is a real advantage.
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While companies like Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) are both major Nvidia customers, they also have their own chips that are starting to gain traction. So, is this business a major threat to Nvidia? Or is there more smoke than fire?
Alphabet and Amazon’s chip businesses are booming
Alphabet and Amazon both operate leading cloud computing platforms. Alphabet’s is Google Cloud, and Amazon’s is Amazon Web Services (AWS). Each is the…
