Big Tech Spend Fuels Next Leg of AI Arms Race

Dan Ives, Global Head of Tech Research at Wedbush Securities, discusses the AI landscape and what stocks he is looking at as we head into 2026.

Meta Platforms Inc. is in talks to spend billions on Google’s AI chips, the Information reported, adding to a monthslong share rally as the search giant has made the case it can rival Nvidia Corp. as a leader in artificial intelligence technology.

A deal would signal growing momentum for Google’s chips and long-term potential to challenge Nvidia’s market dominance, after the company earlier agreed to supply up to 1 million chips to Anthropic PBC.

Google owner Alphabet Inc. is on track to hit a $4 trillion market valuation for the first time when trading opens in New York on Wednesday. Nvidia’s shares were down about 4% in premarket trading.

Meta is in discussions to use the Google chips — known as tensor processing units, or TPUs — in data centers in 2027, The Information reported, citing an unidentified person familiar with the talks. Meta also may rent chips from Google’s cloud division next year, the news outlet said.

An agreement would help establish TPUs as an alternative to Nvidia’s chips, the gold standard for big tech firms and startups from Meta to OpenAI that need computing power to develop and run artificial intelligence platforms.

Nvidia’s stock is already facing headwinds as investors fear a broader AI bubble. Michael Burry, immortalized in The Big Short for his bets against the housing market during the 2008 financial crisis, has scrutinized the chipmaker over circular AI deals, hardware depreciation and revenue recognition.

After Google’s Anthropic deal was announced, Seaport analyst Jay Goldberg called it a “really powerful validation” for TPUs. “A lot of people were already thinking about it, and a lot more people are probably thinking about it now,” he said.

“Google Cloud is experiencing accelerating demand for both our custom TPUs and NVIDIA GPUs; we are committed to supporting both, as we have for years,” a spokesperson for Google said.

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