Chasing a $400 Billion Prize: Google’s New AI Cloud Company Is a Threat to Nvidia and CoreWeave

At its recent I/O conference, Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) shook up the artificial intelligence (AI) world by announcing a slew of new AI services. But one of the company’s most important announcements was a new AI cloud computing company it started with venture firm Blackstone.

While in its early stages, this new company could impact Nvidia‘s (NASDAQ: NVDA) AI hardware business and CoreWeave‘s (NASDAQ: CRWV) AI cloud business. Here’s how.

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Here’s how Alphabet’s new venture could affect Nvidia’s business

Nvidia currently enjoys a dominant position in the AI space, with its chip designs accounting for 86% of revenue in the data center market.

Nvidia built that lead over many years, developing highly capable processors that were first great at graphics processing and are now exceptional at AI compute. The result has been soaring revenue, up 85% in the fiscal 2027 first quarter to $81.6 billion and non-GAAP earnings of $1.87 per share, up 140% for the year.

But not everyone is happy about Nvidia’s dominance. Google, which relies heavily on Nvidia’s processors in its data centers, has been developing its own tensor processing units (TPUs) for years to offload some of its hardware needs.