Nvidia's stock fell as much as 6.5% on Tuesday (November, 25, 2025)following a report from The Information that Google is in advanced talks to sell its custom tensor processing units (TPUs) directly to Meta in a multi-billion dollar deal. This potential agreement, slated for 2027, signals a significant strategic shift for Google, which has historically only rented access to its TPUs through its Google Cloud platform rather than selling the chips outright.
The report intensified existing market concerns that Nvidia's largest customers are becoming its most formidable competitors. Amazon Web Services offers its Trainium and Inferentia chips, and Microsoft has developed its own Maia AI accelerators. This competitive pressure was further highlighted by Amazon's recent completion of a massive data center project, renting half a million of its custom AI chips to leading AI lab Anthropic.
According to the report, Google is also pitching its TPUs to other cloud customers, a move that analysts at DA Davidson had previously speculated could capture up to 10% of Nvidia's annual revenue. In a September note, the same firm expressed that "notable frontier AI labs" had shown "considerable interest" in Google's chips.
In response to growing criticism, including from investor Michael Burry who has drawn parallels to a dot-com bubble, Nvidia issued a memo to Wall Street analysts over the weekend. The company defended its business practices, stating its strategic investments are transparent and that partner companies are showing "rapid" revenue growth, indicating strong underlying demand for AI. The memo explicitly rejected comparisons to historical accounting frauds like Enron, asserting the fundamental soundness of its business.