Amazon, Alphabet, and Microsoft Are All Racing to Design Their Own AI Chips. Here's What It Means for Nvidia.

1 day ago 3

Daniel Sparks, The Motley Fool

Sun, June 7, 2026 astatine 5:32 PM CDT 5 min read

Three of the largest buyers of Nvidia (NASDAQ: NVDA) chips are besides 3 of the companies trying hardest to request less of them. Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), and Microsoft (NASDAQ: MSFT) each plan their ain AI processors now, and each is pushing that silicon deeper into the information centers it's gathering astatine a breakneck pace.

It's casual to work that arsenic a occupation for the institution whose graphics processing units (GPUs) person been the default prime for AI work. On Friday, the marketplace seemed to hold that the institution faces immoderate risks, with Nvidia shares falling astir 6% successful a wide semiconductor sell-off. But the companies gathering their ain chips are besides buying grounds amounts of Nvidia's, and that contradiction sits astatine the halfway of the story.

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Computer servers wrong of a ample information center.

Amazon

Amazon has the astir developed in-house spot story.

The e-commerce and unreality computing company's customized silicon concern -- the Graviton processor, the Trainium AI chip, and the Nitro networking spot -- topped a $20 cardinal yearly gross tally complaint successful the archetypal 4th of 2026.

"If our chips concern was a stand-alone concern and sold chips produced this twelvemonth to AWS and different 3rd parties arsenic different starring spot companies do, our yearly gross tally complaint would beryllium $50 billion," said Amazon CEO Andy Jassy successful the company's first-quarter net call.

Jassy added that the cognition is present 1 of the apical 3 information halfway spot businesses successful the world.

None of this, however, has slowed Amazon's appetite for Nvidia. The institution plans to walk astir $200 cardinal connected superior expenditures successful 2026 -- overmuch of it connected infrastructure that inactive leans heavy connected Nvidia GPUs to service customers filling Amazon Web Services.

Alphabet

Alphabet has designed its tensor processing units, oregon TPUs, for much than a decade, and 2026 whitethorn beryllium the twelvemonth that enactment moves extracurricular its ain walls.

Google has since announced eighth-generation TPU systems, arsenic portion of a strategy that nary longer treats the chips arsenic internal-only. In May, Blackstone announced a associated task with Google to connection TPUs arsenic a rentable unreality service, with an archetypal $5 cardinal committedness and plans to bring 500 megawatts of capableness online successful 2027. That followed an statement to springiness AI laboratory Anthropic entree to arsenic galore arsenic 1 cardinal TPUs, and an earlier reported leasing woody with Meta Platforms.

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