Custom Chips Threaten NVIDIA's Dominance: Wall Street Analyst Warns

A Wall Street analyst has stated that the development of custom chips by large-scale cloud service providers (hyperscalers) poses a 'significant risk' to NVIDIA's leading position in the artificial intelligence market. This development is seen as challenging NVIDIA's current market dominance. According to the analyst's report, hyperscalers' efforts to produce their own chips could reduce dependence on NVIDIA's high-performance GPUs. In particular, major technology companies' shift toward custom chip designs to lower costs and control the supply chain could negatively impact NVIDIA's sales revenue. NVIDIA holds a leading position in the industry with its GPUs widely used in AI and data center workloads. However, hyperscalers developing their own chips could increase competition in this market and narrow NVIDIA's market share. The analyst warned that this trend could limit NVIDIA's growth potential in the long term. The adoption of custom chips by hyperscalers could also weaken NVIDIA's pricing power. As the company relies on high-margin GPU sales, this could create pressure on profitability. The analyst emphasized that investors should consider this risk. This is not investment advice.