Recently, it’s become clear that nearly every Big Tech firm is working toward manufacturing their own AI chips. That’s why we’ve been worried about the world’s most dominant AI chipmaker, Nvidia (NVDA), for a few weeks now.
But this past weekend – amidst the drama at OpenAI – we realized the true reason why investors should move on NVDA stock. It’s Sam Altman.
Altman is the very-recently-ousted CEO of OpenAI. And it seems he was such a good CEO that, when his employees found out he was fired by the board of directors last Friday afternoon, over 90% of them signed a petition saying they would leave the company unless he was reinstated.
Now, as of this writing, Altman has been reinstated as OpenAI’s CEO. But this drama at OpenAI has made clear that Altman is the trusted head of the world’s most talented, experienced, and driven AI engineering team – the same team that built ChatGPT. He has the full backing of the world’s second biggest company in Microsoft.
And he wants to kill Nvidia.
Going Toe-to-Toe With Nvidia
Over the weekend, reports broke that in the weeks leading up to his ousting, Altman was actively working to raise billions from some of the world’s largest investors for a new chip venture.
Codenamed Project Tigris, this venture was aimed at creating AI chips to replace Nvidia’s chips. The concept behind it was to create a firm that mass-produced Tensor Processing Units (TPUs). Essentially, these chips are custom semiconductors specifically designed to handle high volume specialized AI workloads.
And importantly, TPUs are widely considered to be cheaper than Nvidia’s GPUs.
In other words, prior to his firing from OpenAI, Altman was trying to build a lower-cost competitor to Nvidia.
And thanks to this boardroom drama, we think those efforts will likely be accelerated over the coming months.
Since this saga began, Microsoft has made it very clear that it is 100% committed and loyal to Sam Altman. Altman wants to make a new chip company. Microsoft is already working on its own AI chips under Project Athena.
Altman apparently has billions in outside financing lined up. Microsoft has billions on its balance sheet.
It’s easy to connect these dots.
To us, it is very likely that in the coming months, Projects Tigris and Athena merge to create a brand-new custom AI chip project that could become the ultimate Nvidia rival.
The Final Word
As if Nvidia didn’t have enough to worry about already…
The U.S. is levying restrictions against sales to China. Titans Microsoft, Meta (META), Amazon (AMZN), and Alphabet (GOOGL) are all working on their own chip projects. And now a brand-new “super project” aimed at building custom AI chips will likely soon begin – if it hasn’t already.
The writing is on the wall here.
Nvidia’s chokehold on the AI chips market is under attack from all sides.
Does that mean Nvidia is dead? No – far from it. But it does likely mean that NVDA stock is dead because at current levels, the valuation demands perfection. And perfection doesn’t happen when you have so many new, strong competitors.
That means for us as AI stock investors, it is time to move on from NVDA.
And of course, we say that as early, longtime bulls on NVDA stock. But we just sold our NVDA stock position in our model portfolio for more than 1,000% returns.
It’s high time to move on to the next batch of AI superstar stocks that could nab us 1,000% returns over the next few years. Learn all about those potential money-makers.
