NVDA moat shrinks. GOOG, AMZN, CBRS chip away?
Nvidia Current Headwinds.
$NVIDIA(NVDA)$ has long been the undisputed leader in the AI accelerator market, commanding roughly 86% of share.
This dominance, however, is increasingly being challenged as its partners and rivals begin to encroach on its territory.
$Alphabet(GOOG)$, $Amazon.com(AMZN)$ and other major technology companies are no longer content to rely solely on NVDA’s GPUs.
Instead, they are investing heavily in their own chip architectures:
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GOOG’s TPU program, for instance, has secured a massive 5-year, $200 billion commitment from Anthropic.
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AMZN’s Trainium chips meanwhile have attracted $225 billion in commitments, with $Meta Platforms, Inc.(META)$ emerging as a significant customer.
These moves signal a clear intent by Big Tech to reduce dependency on NVDA and diversify their AI compute supply.
Even recent Musk tie up with $Intel(INTC)$ is yet another salient example of how every tech company and venture, is now embarking on diversification and be as ‘self sufficient’ to reduce costs. (see below)
This competitive encroachment comes at a time when NVDA’s growth trajectory is expected to moderate.
After years of explosive expansion, with revenue growth projected at 70% this year (2026), analysts expect that pace to slow to around 32% by 2028.
Such deceleration is natural for a company of NVDA’s scale, but it also underscores the vulnerability of its market position as rivals gain traction.
Importantly, how will Wall Street & investors view this possible ‘demise’ (even though it is not). How will it affect the stock price when quarterly revenue and guidance fail consensus?
The question, then, is whether NVDA is truly “falling behind.”
The evidence suggests otherwise.
While its relative performance may lag peers who are aggressively diversifying into AI chips, NVDA’s entrenched ecosystem, scale, and customer reliance continue to provide a formidable moat.
The recent April & May rebound in its stock price highlights that investors still see NVDA as the backbone of AI infrastructure, even as competition intensifies.
With the rebound, it is once again the first 5 trillion (by market cap), US stock. That should mean something, no ? (see above)
Cerebras IPO – New Pressure Source.
If NVDA’s current headwinds stem from Big Tech rivals, the upcoming IPO of Cerebras introduces a fresh layer of competitive pressure.
In the past, I have covered about Cerebras (CBRS) and was excited then, as is now about its impending IPO.
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17 Oct 2024 - CBRS IPO soon. Ready to top NVDA & AMD. Yes !
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22 Sep 2024 - NVDA, AMD... Beware ! Chip Maker Shake-Up Coming ?
CBRS’ offering is nothing short of spectacular:
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The newly finalized price will be $185 per share.
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The IPO is expected to raise $5.55 billion.
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It will help CBRS achieve a valuation of approximately $56 billion, making it one of the largest US tech IPOs since Uber in 2019.
Like it or not, this scale alone signals that investors see CBRS as a credible challenger in the AI hardware space.
A further boost its IPO has been the recent announcement of the company’s partnership with OpenAI. That has been particularly significant.
OpenAI has committed between $20 - $30 billion for 750 megawatts of CBRS compute capacity and with a contractual option to (potentially) taking a 10% equity stake.
This deal is not merely a financial arrangement; it represents a strategic shift away from NVDA dependency.
For OpenAI, diversifying its hardware base is essential to scaling its models, and CBRS’ wafer-scale architecture offers a compelling alternative.
The AI-chip advantage.
Technologically, CBRS’ Wafer-Scale Engine (WSE)) 3 chips stand out.
At 58x the size of NVDA’s GPUs, they promise faster inference at lower power consumption.
This positions CBRS as a strong contender in inference workloads, an area where NVDA has traditionally dominated.
If CBRS can deliver on these promises at scale, it could carve out a meaningful niche in the AI compute market.
Financial Prowess ?
Financially, CBRS has shown impressive momentum, with revenue growing +76% to $510 million in 2025 and swinging to a +$238 million profit.
However, this profitability was partly boosted by paper gains from restructuring deals linked to UAE entities, raising questions about sustainability.
Also, customer concentration remains a concern.
This is because 86% of its revenue still comes from UAE-based organizations, that includes (a) G42 and (b) Mohamed bin Zayed University.
While the recent OpenAI partnership diversifies its base, reliance on a single region underscores the fragility of its financial model.
Wrapping up on a ‘brighter’ note, institutional support has been strong, with backing from Fidelity, Benchmark, Foundation Capital, and Eclipse.
This provides CBRS with credibility and capital to scale. Investors will be watching closely to see whether it can translate technological promise into durable profitability.
Will NVDA falter - is CBRS Worthy?
Personally I think the arrival of CBRS on public markets does not spell doom for NVDA.
Its entrenched ecosystem, scale, and deep integration with existing customers like Microsoft (MSFT), GOOG, AMZN, and META ensure that it will remain dominant in the near term.
CBRS adds pressure, particularly in inference workloads, but NVDA’s moat is not easily breached.
CBRS, meanwhile, represents a speculative but potentially high-reward investment.
Its unique chip architecture and strategic partnership with OpenAI, give it credibility as a challenger.
Yet, there are risks over- (i) its heavy reliance on UAE revenue, (ii) past operating losses, and (iii) dependence on OpenAI’s commitments - raising questions about durability.
To me, CBRS is worth a consider - with an appreciation of its speculative nature, I have to add.
In summary, NVDA will not falter outright when CBRS lists.
However, CBRS will definitely intensify competitive pressure.
NVDA in the meantime will remain as the backbone of AI infrastructure, while CBRS offers a bold, high-risk, high-reward alternative.
The market is no longer NVDA’s alone. A new chapter in AI hardware will be defined by how these players coexist and compete. Agree ?
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Do you think you will invest in CBRS IPO, given that it is cheaper than NVDA ?
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Do you think NVDA will trend lower (1) on the run up to CBRS IPO & (2) on CBRS IPO day ?
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Given such 'inflated' price, I rather invest in NVDA instead.... What do you think ?
Friday they are poised to give back - 2.0% when trading resumes. Will it fall some more after the euphoria? Hmmm.....
BTW, NVDA is a 5.71 trillion by market cap company, the ONLY 5 trillion listed company so far....
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