By Adam Clark

Nvidia was gaining early on Wednesday after Google-parent Alphabet committed to spending on artificial-intelligence infrastructure and rival Advanced Micro Devices' AI chip revenue disappointed.

Nvidia shares were up 0.5% at $119.18 in premarket trading. The stock rose 1.7% on Tuesday.

Alphabet CEO Sundar Pichai said the company expects to invest around $75 billion in capital expenditures in 2025. That should help lessen concerns around whether Chinese firm DeepSeek's low-cost AI models will lead big technology companies to rethink major AI investment.

However, similar to other Big Tech peers, Alphabet did say it was expanding the use of its in-house chips, known as tensor processing units, or TPUs.

"In the fourth quarter, we saw strong uptake of Trillium, our sixth-generation TPU, which delivers 4 times better training performance and 3 times greater inference throughput compared to the previous generation," Pichai told analysts on an earnings call. "We also continue our strong relationship with Nvidia," he added.

Custom chips look like the only major competition for Nvidia's AI's hardware at the moment, after Advanced Micro Devices' data-center revenue disappointed the market in its fourth-quarter earnings. AMD didn't provide specific guidance for sales of its MI300 AI chip but suggested both data-center business and sales of AI GPUs should grow by strong double-digit percentages in 2025.

"We see a contested path for MI3XX-family share gains vs. Nvidia's dominant accelerator lineup, CUDA software ecosystem, and GB200 rack-scale systems," wrote Oppenheimer analyst Rick Schafer in a research note.

AMD was falling 9.3% in premarket trading. Among other chip makers Broadcom -- which helped develop Google's TPUs -- was rising 3.1%.

Write to Adam Clark at adam.clark@barrons.com

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February 05, 2025 07:27 ET (12:27 GMT)

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