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Nvidia shares fell sharply on Tuesday on fears that Google is gaining ground in artificial intelligence, erasing $150bn in market value from the AI chipmaker.
The sell-off saw Nvidia’s shares fall 3.5 per cent, making up ground after losing more than 6 per cent in early trading. The declines rippled through companies linked to the chipmaking giant.
Server maker Super Micro Computer, which is a key partner to Nvidia, fell 2.6 per cent, while software group Oracle, which has committed to spending billions of dollars on the chipmaker’s high-performance systems, lost 1.1 per cent.
Shares in data centre operator CoreWeave, in which Nvidia owns a 6 per cent stake, fell 2.3 per cent, alongside its AI cloud rival Nebius, which was down 1.6 per cent.
Investors blamed the declines on excitement surrounding Alphabet’s own AI-specialised chips, known as tensor processing units.
Google last week released Gemini 3, its latest large language model, which is considered to have leapfrogged OpenAI’s ChatGPT. Google’s model was trained using TPUs rather than the Nvidia chips that power OpenAI’s systems.
The release of Gemini 3 “may prove to be a subtler but more important version of the DeepSeek disruption”, said Mike O’Rourke at Jones Trading, referring to the Chinese AI start-up whose emergence in January triggered a sharp sell-off for US tech groups including Nvidia.
“The market is embracing the view that Google is the clear-cut AI leader,” he added.
Charlie McElligott, a strategist at Nomura, also likened Gemini 3’s impact to the DeepSeek shock. Alphabet’s latest model had “reset” the “AI hierarchy chess board” and pulled the market into a “new DeepSeek moment”, he said in a note to clients.
A report in The Information late on Monday suggested that Google was pitching potential clients, including Meta, on using TPUs in their own data centres rather than Nvidia’s chips.
Google’s TPUs have until now only been available for customers to rent through its cloud computing service. Meta, like OpenAI, is one of Nvidia’s biggest customers.
Nvidia acknowledged Gemini’s impact in a statement on Tuesday, writing: “We’re delighted by Google’s success — they’ve made great advances in AI and we continue to supply to Google.”
The company added: “Nvidia is a generation ahead of the industry — it’s the only platform that runs every AI model and does it everywhere computing is done.”
Alphabet shares rose 0.7 per cent on Tuesday, pushing it close to a $4tn market capitalisation for the first time.
Nvidia has now lost more than $700bn in market value since it peaked just above $5tn less than a month ago. AMD, Nvidia’s main rival in AI-focused chips, fell 6 per cent on Tuesday.
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