Huge chip information from Google… what it means for Nvidia and the AI buildout… how Luke Lango noticed it coming… one other instance the place Luke was there first… the place to take a position now for the following market surge
This morning introduced an enormous shakeup to the tech world, and there could possibly be portfolio-rattling penalties.
We discovered that Meta (META) is in talks with Alphabet (GOOGL) to doubtlessly purchase billions of {dollars}’ price of Alphabet’s TPU chips relatively than the trade customary GPU chips produced by companies resembling Nvidia (NVDA) (disclaimer: I personal GOOGL).
This could possibly be an enormous shift for the tech sector – and investor portfolios. As I write on Tuesday, GPU large Nvidia is down 5%.
Let’s again up and fill in a number of particulars…
Consider AI like a metropolis that’s exploding in measurement. Nvidia has been promoting the development equipment – the cranes, the bulldozers, the gear that builds the skyscrapers.
Properly, with this morning’s information, Google walked in and stated, “Really, we make our personal customized equipment now – and it would even be higher for sure sorts of buildings.”
If Google’s proper, then probably the most important a part of AI’s future – the infrastructure – would possibly shift away from Nvidia’s long-standing dominance.
This “equipment” includes TPUs and GPUs
Nvidia’s GPUs (Graphics Processing Models) have been the usual for coaching and operating massive AI fashions. They’re versatile, highly effective and have a powerful ecosystem behind them.
Google’s TPUs (Tensor Processing Models) are completely different: They’re customized silicon (usually referred to as ASICs) optimized for machine-learning-specific workloads – particularly inference, large-language fashions, and so on.
The massive information this morning is that Google is transferring to commercialize its TPUs extra extensively, increasing entry past restricted companions like Anthropic.
Right here’s Bloomberg:
Meta’s seemingly use of Google’s TPUs, that are already utilized by Anthropic, exhibits third-party suppliers of huge language fashions are more likely to leverage Google as a secondary provider of accelerator chips for inferencing within the close to time period.
Meta’s capex of a minimum of $100 billion for 2026 suggests it would spend a minimum of $40-$50 billion on inferencing-chip capability subsequent 12 months, we calculate.
If Google succeeds, the worth of the “platform” or “ecosystem” in AI {hardware} shifts.
It received’t solely be about GPUs from Nvidia anymore; there could possibly be significant different structure in play – which may have an effect on margins, progress, and aggressive benefit.
Does this imply dump Nvidia?
No.
Simply because an organization will get challenged doesn’t imply it’s lifeless. Nvidia nonetheless has huge scale, ecosystem, prospects, software program help – these don’t evaporate in a single day.
Plus, Alphabet’s TPU chips aren’t a positive factor but.
Right here’s Bloomberg:
A lot depends upon whether or not the tensor chips can reveal the ability effectivity and computing muscle essential to grow to be a viable possibility in the long term.
Nonetheless, we should perceive this sudden danger after which reevaluate how a lot publicity we would like and why.
On one hand, Nvidia nonetheless has the world’s deepest ecosystem of instruments, builders, and software program constructed particularly to work with their {hardware}. That’s not one thing Google can replicate in a 12 months or two.
However Google doesn’t have to “win” outright to alter the panorama. It solely must show that its TPUs are a viable different.
All it takes is one main buyer – resembling Meta – shifting a part of its AI workload to Google silicon, and out of the blue the bottom beneath Nvidia’s throne begins to rumble.
However this story is approach greater than Nvidia alone
TPUs could also be considerably cheaper to function than GPUs. And if that proves true at scale, the consequences go far past GOOGL and NVDA buying and selling blows within the inventory market.
Nvidia’s GPUs are extremely highly effective, and likewise extraordinarily versatile – designed to deal with a variety of computing duties.
However that flexibility comes at a excessive value since you’re paying for capabilities that aren’t all the time obligatory for AI workloads.
Google’s TPUs, then again, are extremely specialised chips constructed nearly completely for one factor: accelerating the matrix math that powers large-scale AI fashions.
By stripping out all the things nonessential, Google could make these chips easier, extra power-efficient, and most significantly, cheaper to run. Decrease element prices and decreased power utilization end in decrease complete compute prices for patrons.
If TPUs take main market share, it will change your entire trade – and doubtlessly, make Google the brand new AI king…
If TPUs ship comparable efficiency per greenback – or higher – the economics of AI change in a single day.
The most important know-how corporations spend billions operating AI fashions. If Google gives a considerably cheaper different, these corporations have a monetary incentive to shift extra of their workloads away from Nvidia {hardware}. And that has ripple results…
Cloud platforms would want to regulate pricing… AI startups would rethink their value constructions… and traders must reassess Nvidia’s future progress assumptions.
To be clear, my level will not be that Nvidia is out of the blue in bother. It’s that the market is out of the blue going through the chance that AI compute – the most costly uncooked ingredient on this complete revolution – is probably not as locked-in or as costly because it appeared final week.
Take into account the implications for all these information facilities popping up in every single place…
Take into account the implications for all that capex spend that the hyperscalers have already dropped…
Take into account how this information might redirect trillions of {dollars}’ price of capital flows over the following few years…
Backside line: Cheaper AI would change all the things. And Google simply cracked that door open.
Right here’s the place issues get much more fascinating…
Whereas Wall Road is simply waking as much as the TPU narrative at the moment, among the sharpest folks inside our personal analysis group have been mapping this out months in the past.
Again in early June, an inner electronic mail thread began circulating between Mike Merson, editor of the TradeSmith Digest, Luis Hernandez, InvestorPlace’s Editor in Chief, Senior Analyst Brian Hunt, and our know-how skilled Luke Lango, editor of Early Stage Investor.
What stood out wasn’t simply that they have been speaking about TPUs… however how they have been speaking about them.
Luke, particularly, was out in entrance of the curve. His core perception got here all the way down to this evolving break up inside AI:
GPUs > TPUs on AI coaching… however TPUs > GPUs on AI inferencing.
That line captured the quiet turning level that Wall Road hadn’t seen but. However Luke laid it out much more clearly:
We’re going from AI coaching to inferencing, and that requires a brand new kind of AI chip.
GPU utilization ought to fall… TPU utilization ought to rise.
After which the kicker – the half at the moment’s market motion is validating:
NVDA is behind on TPUs. GOOGL is the one firm making TPUs at scale proper now.
So, the play is to put money into the GOOGL TPU provide chain.
Since that electronic mail thread on June 4, 2025, GOOGL is up 93% – practically 4Xing NVDA’s 24% return over the identical interval.
Stepping again, that is hardly the primary time that Luke has seen huge strikes coming lengthy earlier than Wall Road.
Let’s have a look at one other current instance – as a result of the chance to revenue right here is simply getting began…
Between July 1, 2022, and July 1, 2025, MP Supplies (MP) was lifeless cash
Throughout a interval by which the S&P jumped 64% and the Nasdaq climbed 83%, MP didn’t simply path the main indexes, it destroyed investor wealth.
Have a look…
If you’re a money manager who put clients into MP, you’re likely out of a job with this kind of performance. And for individual investors, this is a huge drag on retirement timing.
But as you’re likely aware, this wasn’t the end of the story.
Here in 2025, the U.S. government has launched a massive, multitrillion-dollar effort to secure America’s dominance in artificial intelligence and other critical technologies.
Behind this effort is a simple logical progression…
We’re in an AI race against China… Beijing controls 80% of the rare earth elements (REEs) that are critical to building out our cutting-edge AI, robotics, and defense systems… so, President Trump has been on a warpath to secure these REEs… a handful of specific REE stocks – MP being one of them – stood to benefit.
Sure enough, in July, MP Materials announced that the Pentagon would purchase $400 million of its stock, taking a 15% ownership stake through structured agreements. The stock surged, putting subscribers of our technology expert Luke Lango up about 3X on their MP investment in short order.
Now, I’m not telling this to brag on Luke, but to call your attention to something important…
The same methodology Luke used to find MP before it received that firehose of federal dollars is the same one Luke is using today to find the next target of the government.
So, if you weren’t a part of that MP surge, don’t worry – we’re still in the beginning of this government spending spree.
How to spot the government’s next move
So, what was Luke’s methodology that enabled his early recommendation of MP?
It’s the same one he just codified and offered as a blueprint for investors today.
From Luke:
Here’s a simple three-part screen for predicting future winners:
- Right Industry: Is it in a sector Washington deems essential (AI, semiconductors, critical minerals, drones, nuclear, cybersecurity, etc.)?
- Right Company: Is it the clear leader with the best shot at solving the national-security problem?
- Right People/Relationships: Do they have U.S. operations, D.C. ties, or credible strategic backers?
If a company checks these three boxes, it’s a strong candidate for federal support… and often just one announcement away from a major stock move.
Luke says MP was only the beginning
According to him, we’re entering Act 2 of a massive, government-driven tech push – one that could send a new class of companies soaring as Washington deploys more capital, more contracts, and more strategic investments.
We’re talking rare earths, semiconductors, small nuclear reactors, robotics, advanced software, and drone technologies – it’s an enormous opportunity set with triple- even quadruple-digit return opportunities.
Back to Luke:
There are dozens of companies that haven’t yet received federal backing… but almost certainly will.
And investors who buy those companies before Washington strikes will capture the biggest gains of the entire AI Boom.
I’m talking about potential 500%… 1,000%… even 2,000% returns.
This is Act 2.
Over the last six months, Luke has done a deep dive into this “Act 2” opportunity, and he’s put together his U.S. Government AI Shortlist. These are the highest-probability corporations in line for funding, partnerships, or assured contracts.
There’s one particularly that Luke says stands out. It sits on the very heart of the AI provide chain – and Luke is giving it away.
It’s in his newest briefing on this broader alternative. You’ll get its title, ticker, and Luke’s rationalization for its 10X return risk if you review the broader research package. It’s completely free.
Now, a fast timing clarification…
For those who learn yesterday’s Digest, you may be asking your self, “Now? Didn’t Luke simply advise traders to not rush again into at the moment’s market?”
Properly, a number of hours after yesterday’s Digest hit your inbox, Luke despatched out a flurry of “Purchase Alerts” from his numerous funding companies.
Right here he’s from his Early Stage Investor Every day Notes explaining:
For months, we’ve walked you thru each AI bear speaking level — overspending, round financing, accounting noise, valuation panic — and confirmed why none of it breaks the AI Increase. However we additionally warned: we don’t catch falling knives. We watch for power.
Properly… the flip simply occurred.
Sentiment is popping. The Fed is popping. The AI narrative is popping. And the following leg of the AI Increase is establishing proper in entrance of us.
That is the second to purchase the dip in AI stocks.
Wrapping up
Luke says the uncertainty is behind us.
This is identical analyst who noticed the TPU shift months earlier than at the moment’s headlines…and who handed subscribers triple-digit positive aspects in MP…
He’s now saying the following section of the AI Increase is formally underway.
Take into account your self forward of the curve.
Right here’s Luke’s to take us out:
The White Home is actively selecting and funding the businesses it deems essential to profitable the Twenty first-century tech race.
The investors who recognize this shift will be the ones who get rich from it.
Have a very good night,
Jeff Remsburg
