A CNBC report that key customer Meta could partner with Google to use its Tensor Processing Units (TPUs) caused a 3% dip in Nvidia's stock. Nvidia asserted its chips are more flexible and powerful than the custom ASIC chips like Google's TPUs, claiming its product "offers greater performance, versatility, and fungibility than ASICs," CNBC reported.

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Analysts report Nvidia holds more than 90% of the AI chip market, but Google's proprietary chips are gaining attention as a potent, less costly substitute. Unlike Nvidia, Google does not sell its TPUs directly but offers them for lease through Google Cloud and uses them internally.

Earlier this month, Google launched its highly-rated Gemini 3 AI model, which was trained on its custom TPUs, not Nvidia GPUs. A Google spokesperson commented that demand for both custom TPUs and Nvidia GPUs is accelerating, and Google "We are committed to supporting both, as we have for years."

Nvidia CEO Jensen Huang addressed the TPU competition in his recent earnings call with investors, noting Google buys his GPUs and that Gemini can run on Nvidia technology. Huang confirmed contact with Demis Hassabis, Google DeepMind CEO, who texted that the theory on creating stronger AI by using more data and chips – known as "scaling laws" – is "intact." Nvidia believes this will drive even more demand for its systems, CNBC reported.

Hassabis texted that the theory on creating stronger AI by using more data and chips – known as "scaling laws" – is "intact." Nvidia believes this will drive even more demand for its systems, CNBC reported.

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This significant upswing demonstrates a marked shift in attitudes toward Alphabet after the 2022 introduction of ChatGPT led certain investors to worry the firm had lost its AI advantage, despite having invented much of the foundational technology for generative AI. Alphabet recovered its momentum this year by making its cloud division a key contributor to growth, which attracted an investment from Warren Buffett's Berkshire Hathaway, and its new Gemini 3 model is garnering excellent initial reviews.

The milestone, however, could intensify anxieties among some executives who caution that rising valuations have detached market trends from business reality, prompting concerns over an economic bubble reminiscent of the 1990s dot-com era. These bubble fears are also amplified by circular transactions involving OpenAI and Nvidia, two prominent firms in the AI sector. Analysts, nevertheless, maintain that Google is strongly positioned in the AI competition because of its ample cash reserves, its own in-house chip production offering an alternative to Nvidia's expensive processors, and its massive internet search operation, which is already experiencing benefits from AI incorporation.

In October, the moment of truth arrived for the AI tech titans as investors worldwide held their breath after Wall Street's close when Microsoft, Alphabet (Google), and Meta (Facebook) – collectively worth nearly 10 trillion dollars – began releasing their quarterly earnings reports in another attempt to beat forecasts.

Google (through its parent company Alphabet) beat forecasts by 26% ($2.87 per share compared to the $2.27 expected) with revenues of 100 billion dollars. Microsoft also beat forecasts by 14% ($3.72 per share compared to the $3.6 expected). Meta on the other hand had to pay 15 billions in a one-time payment, which resulted in a miss of 84% in the earnings.

Alphabet reported more than $100 Billion of revenue in a quarter for the first time ever. Google parent company Alphabet also reported strong third-quarter results, with revenue climbing 16% year-over-year. Google Search & Other grew 15%, while YouTube Ads increased 15% during the period. Google Cloud posted the strongest growth at 34%, though Google Network saw a 3% decline. The company's EBIT rose 9.5% with a margin of 31%, and earnings per share jumped 35%.

The head of Google's parent firm Alphabet, Sundar Pichai, has recently cautioned the BBC that every company would be impacted if the AI bubble were to burst. Speaking exclusively to BBC News, Pichai acknowledged that while AI investment growth is an "extraordinary moment," there is some "irrationality" in the current boom. Amid fears in Silicon Valley of soaring valuations, Pichai warned, "I think no company is going to be immune, including us."

His wide-ranging interview at Google's California headquarters, reported by the BBC, touched on energy needs, climate targets, UK investment, and AI's effect on jobs, coming as market scrutiny intensifies. Alphabet's shares have doubled in seven months to $3.5 trillion as market confidence in its ability to counter OpenAI grows. A specific focus remains on Alphabet's competition with Nvidia, run by Jensen Huang, which recently hit a $5 trillion valuation, even as analysts question the $1.4 trillion in deals surrounding OpenAI.

Pichai's remarks about "irrationality" echoed Alan Greenspan's 1996 "irrational exuberance" warning during the dotcom boom. Pichai told the BBC the industry can "overshoot" in such cycles. "We can look back at the internet right now. There was clearly a lot of excess investment, but none of us would question whether the internet was profound," he said. "I expect AI to be the same. So I think it's both rational and there are elements of irrationality through a moment like this." His comments follow a similar warning from JP Morgan's Jamie Dimon, who told the BBC some AI investments would "probably be lost." Pichai argued Google's "full stack" model provides a better position to handle turbulence.

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