Nvidia (NASDAQ:NVDA) just reshuffled its investment portfolio, cutting its stake in Arm Holdings by 44% while exiting Serve Robotics and SoundHound AI. But it's not just about exitsNvidia is doubling down on AI, picking up a stake in self-driving startup WeRide (NASDAQ:WRD), sending the stock up over 93% at 12.06pm today, and adding 1.2 million shares in AI cloud firm Nebius (NASDAQ:NBIS). While trimming its position in Arm might raise some eyebrows, analysts see this as Nvidia playing the long game, reallocating capital toward high-growth AI infrastructure plays.

• Warning! GuruFocus has detected 2 Warning Sign with ARM.

Meanwhile, Arm Holdings (NASDAQ:ARM) is making a bold moveditching its traditional licensing-only model to launch its own chips, with Meta (NASDAQ:META) already signed on as a key customer. The company is set to roll out its first in-house CPU for data centers this summer, outsourcing production to a major manufacturer like Taiwan Semiconductor Manufacturing (TSM). This puts Arm in direct competition with long-time partners, including Nvidia. SoftBank, driven by its AI ambitions, is considering acquiring Ampere, which could potentially lead to Arm playing a bigger role in chip manufacturing.

The AI chip race is heating up, with Nvidia refining its focus and Arm making a play for the manufacturing game. Nvidia is steering toward high-growth AI investments, while Arm is betting on vertical integration. With both companies repositioning for the next AI boom, investors are watching closelybecause the moves being made today could determine who leads the AI revolution tomorrow.