Did Meta Platforms Just Say "Checkmate" to Nvidia?

One artificial intelligence (AI) stock that got off to a scorching start this year is social media juggernaut Meta Platforms (META 1.11%). Just a couple of weeks ago, Meta's leadership told investors that 2025 is going to be a jam-packed year as the company seeks to continue moving aggressively on its AI roadmap.

To be specific, Meta is preparing to spend up to $65 billion in AI infrastructure this year -- representing a 65% increase year over year. Given the company works closely with Nvidia and Advanced Micro Devices, and is also working with Broadcom to design its own custom inferencing chips, it's not too surprising that Meta is planning for such a robust increase in capital expenditures (capex).

What may be surprising, though, is that Meta may have just found a new source for its capital -- and it could put Nvidia in a jam. Below, I'll dig into some recent news involving Meta right now and detail how Nvidia could be impacted.

How Meta might be trying to leapfrog Nvidia

Even though Nvidia dominates the graphics processing unit (GPU) market, the company has been facing some competition beyond the usual suspect of AMD. Namely, many of Nvidia's largest customers, such as cloud hyperscalers Microsoft, Amazon, and Alphabet, as well as social networking platform Meta, are investing in their own custom chip products. The rationale behind these investments is to complement existing chipsets with new architectures in an effort to migrate away from a full reliance on Nvidia's stack.

Meta's foray into the GPU realm revolves around its Meta Training and Inference Accelerator (MTIA) chip. While the MTIA chip is still a nascent initiative at Meta, the company may have identified a way to push the project forward much faster than initially anticipated.

Several media outlets are reporting that Meta is considering acquiring FuriosaAI, a chip start-up out of Korea. FuriosaAI claims that its processing power is more cost efficient compared to Nvidia's newest GPUs. If this is true, that could change the game for Meta as it pertains to its capex plans this year and its focus on acquiring more data center chips.

In theory, the cost efficiencies brought from FuriosaAI as well as the company's chip development processes could bring some obvious synergies to Meta's AI budget and its product roadmap as development for the MTIA chips continues.

Could Meta's deal spell trouble for Nvidia?

On the surface, the introduction of the MTIA chip might seem like a crisis for Nvidia.

However, Meta's chip is only about a year old -- so it's unlikely that the company developed something as sophisticated or more when compared to Nvidia in just one year.

For this reason, I wouldn't say that Nvidia is at risk of losing Meta as a customer soon. Moreover, the news around Meta's interest in FuriosaAI is, for now, still a rumor.

Furthermore, even if Meta does move forward with acquiring FuriosaAI, there will be a lot of work to do on the integration and product development sides of the house. Augmenting FuriosaAI's technology with Meta's AI isn't necessarily a bad thing for Nvidia. If anything, the added competition could lead to more innovation and cutting-edge architectures in the GPU landscape.

I think it's a matter of time before the semiconductor sector begins to consolidate anyway. Many of Nvidia's largest customers are already focusing on their own in-house chipware. With that in mind, I wouldn't be surprised to see big tech start acquiring or partnering with other chipmakers outside of the Nvidia ecosystem over the next few years.

At the end of the day, I do not see a potential acquisition by Meta as a checkmate move against Nvidia. Unless and until a deal is formed, any movement in Nvidia's stock based on Meta's motives is rooted in emotion-driven speculation.