Ryan Vestelica

Hey, good morning.

Thanks for having me.

So I would say that while there are a lot of differences between NVIDIA's chips and Alphabet's, Alphabet's are designed for one specific purpose, which is working with AI workloads in the cloud, which is really the dominant use case for a lot of the AI infrastructure that's being done right now.

So there is certainly a very big market for the TPU chips.

As we saw with the Anthropic deal that was announced,

announced a couple of weeks ago and with this report with Meta.

So that opens up potentially a huge new market for Alphabet, and it does put Nvidia's market share under a little bit of pressure.

Now, this is still very early days, and it's not like Alphabet is out there

selling chips to people in the same way that Nvidia is, but certainly people are reassessing what our market share is going to look like over the coming years.

And if Nvidia's is a lot smaller than previously expected, what does that mean for the stock?

What does that mean for the valuation?

What does that mean for its expected growth rates going forward?

No, in fact, I spoke with him yesterday and he said he is more negative on Nvidia now than he was a couple of weeks ago.

I would say that the new concerns about custom silicon and new rising competition for Nvidia, this comes at a time when people are increasingly questioning the AI trade.

There is a lot of debate right now about the amount of spending going on, how durable is this going to be, how sustainable, what kind of returns are companies seeing on this, and if they're not seeing big returns on this investment,

Are they going to pull back on their AI spending going forward?

NVIDIA is really at the heart of a lot of AI debates right now.

And then you add in this new one where what does their market share look like?

What about competition?

That is just another reason for people to be skeptical.