Google Shifts from Customer to Competitor... Nvidia Says "We Are a Generation Ahead"

NVIDIA X (X) Post. NVIDIA Newsroom X

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"We are a generation ahead of the industry (NVIDIA is a generation ahead of the industry)."

Nvidia, the leading company in artificial intelligence (AI) semiconductors, delivered a message that appeared to keep Google in check, emphasizing that its chips are a generation ahead of the industry as Google pursues 'semiconductor independence.'

On November 25 (local time), Nvidia stated through its official account on the social networking service X (formerly Twitter), "Ours is the only platform that powers every AI model and operates everywhere computing happens," reiterating its technological lead.

The company also said, "We are pleased with Google's success. Google has made significant progress in the AI field," but added, "We continue to supply products to Google." Nvidia further emphasized, "Nvidia products offer superior performance, versatility, and compatibility compared to application-specific integrated circuits (ASICs) designed for particular AI architectures or functions."

Nvidia, as the industry leader, emphasized the outstanding performance of its graphics processing units (GPUs) and sought to keep Google in check because Google is emerging as a competitor in the AI chip sector.

Google has been manufacturing AI chips called tensor processing units (TPUs) for the past ten years and has been working to create the perception that these chips can replace Nvidia GPUs, which are expensive and difficult to obtain. At the end of last month, Anthropic, which operates the AI chatbot 'Claude,' signed a cloud usage agreement to utilize 1 million of Google's TPUs.

In particular, there are reports that Google is seeking to change its product supply policy with the recent launch of its seventh-generation TPU, 'Ironwood.' Until now, Google has only allowed access to its TPUs through its own cloud, but it is now considering supplying TPUs directly to customers.

IT media outlet The Information recently reported, citing sources, that Meta is in discussions to adopt Google's TPUs through this new approach. If this deal is finalized, Nvidia's influence over Meta, one of its major clients, could diminish, and Google would emerge as a more direct competitor.

Jensen Huang, CEO of Nvidia, recently commented on Google's TPUs after the company's earnings announcement, stating, "Google is a customer, and (Google's AI model) Gemini also runs on Nvidia technology."

In a statement released the same day, Google said, "Demand is increasing for both custom TPUs and Nvidia GPUs," and added, "We will continue to support both, as we have for years."

Meanwhile, on the previous day, Alphabet, Google's parent company, closed at $323.44 per share for Class A stock, up 1.53% from the previous session. In contrast, Nvidia's stock closed down 2.59% at $177.82. Nvidia shares at one point fell by more than 6% during the session, but the decline narrowed as bargain hunters entered the market.

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