Episode summary
Nvidia-Google AI Chip Rivalry Escalates on Report of Meta Talks | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Mandeep Singh, Lindsay Dutch, Mary Ross Gilbert, Diana Rosero Pena
Summary
Meta’s reported talks to buy billions of dollars of Google AI chips sharpened the case that hyperscalers want alternatives to Nvidia, especially for inference workloads. The guest argued that Nvidia still dominates training, but Meta’s expected $600 billion of capex through 2028 makes single-supplier dependence risky. Google’s seventh-generation TPUs, cheaper token economics, and improving Gemini model give Alphabet a real opening, even if Nvidia’s revenue outlook remains enormous.
The retail segment showed a mixed but generally resilient consumer. Dick’s Sporting Goods raised guidance on strength in its legacy business, but investors worried about Foot Locker’s weak fourth quarter, markdowns, and turnaround costs. Best Buy also beat and raised, with demand holding up in computing, phones, gaming, and improving home theater, though management sounded cautious on the holiday quarter and leaned on promotions and membership perks.
Kohl’s and Abercrombie & Fitch both benefited from better-than-feared results and short covering. Kohl’s is seeing progress from private brands, beauty, and a return to basics, while Abercrombie’s Hollister business is offsetting weakness in the namesake brand. In packaged food, JM Smucker faced tariff pressure, weak pricing power, and a more price-sensitive consumer as private label keeps gaining share.
Key takeaways
- The guest said Meta wants to diversify chip supply because it could spend up to $600 billion in capex through 2028.
- Google’s TPUs are now on their seventh generation, and the guest said Gemini’s lower-cost inference makes Google credible versus Nvidia.
- Dick’s raised outlook on its core business, but Foot Locker’s turnaround is likely to pressure margins with steep markdowns and weak fourth-quarter comps.
- Best Buy’s demand stayed solid in computing, phones, gaming, and home theater, but management is still guiding conservatively for the holidays.
- Kohl’s recovery is being driven by private brands and beauty, while Abercrombie’s Hollister is cushioning weakness in the main brand.
- JM Smucker expects about $75 million of tariff impact in fiscal 2026, while private label competition is pressuring packaged food names.
Notable quotes
“they plan to spend up to $600 billion in capex through 2028”
“They probably have a virtual monopoly when it comes to the training”
“Google is in the seventh generation of their TPU”
“they don't want to be giving Nvidia, you know, $300 billion just for the chips”
“The legacy business remained very strong in the third quarter”
How the episode opens
Bloomberg Audio Studios podcasts radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m.
Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Metaf platforms in talks to spend billions on Google's AI chip suggesting that the search giant Google has made the case that it can rival Nvidia as a leader in in artificial intelligence technology.
Um let's check in with an expert who's got an opinion there. Mandep Singh, senior tech analyst for Bloomberg intelligence. Mande, what do you make of this news with with Meta uh investing and spending money on Google's AI chips?
What does that mean for the space and you know Nvidia in particular? because we're seeing some big moves in the stock market today. Uh look, I mean, we know capex numbers are going up not just next year, probably through 2028 because Meta has given some sort of a three-year forecast.
In fact, Mark Zuckerberg has mentioned that uh you know they plan to spend up to $600 billion in capex through 2028. So when you are spending such big sums, you don't want to be dependent on one supplier. And in this case, Nvidia still has the best chips.
They probably have a virtual monopoly when it comes to the training. But on the inferencing side, I think everyone especially among the hyperscalers who don't have their own chips are looking to diversify. And I think uh I'm very surprised that Meta is looking to buy something from Google given they compete you know so fiercely on the digital ad side but that's uh really a reflection of the changing tech stack and how uh these companies are evolving with AI.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai chip competition
- meta capex
- alphabet ai chips
- retail earnings
- consumer staples earnings
Companies and tickers mentioned
- NVDA
- GOOGL
- GOOG
- META
- DKS
- BBY
- KSS
- ANF
- SJM
- Nvidia
- Meta Platforms
- Dick's Sporting Goods
- Best Buy
- Foot Locker
- Kohl's
- Abercrombie & Fitch
- JM Smucker
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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