Nvidia Is Taking a $3 Billion Chunk of Meta's Equity. It's Over To Broadcom.

Dow Jones
3小時前

The artificial-intelligence chip ecosystem just keeps getting more tangled. Nvidia is making yet another investment and this time it's in Meta Platforms, as the chip maker looks to head off a potential threat from rival Broadcom.

Nvidia said late Monday that it would invest $3 billion in Meta's recently announced share offer. In exchange, Meta will expand its deployment of Nvidia hardware to support its AI agents and the two companies are considering other technological collaborations.

Nvidia shares were up 0.1% in premarket trading Tuesday, while Meta was broadly flat.

Nvidia making big investments in the AI ecosystem is hardly a new thing, but this one is a bit different. Nvidia has mostly backed smaller AI start-ups or hardware suppliers who could do with the boost of its public backing to strengthen their financial position. This deal is with a huge publicly-listed customer who already does plenty of business with Nvidia and presumably could raise its targeted funds without Nvidia's help.

Still, there is logic behind Nvidia's move. Meta has suddenly become a more important AI player with the success of its Muse agent. And there was a risk that Meta might become confident enough in its own custom chips -- developed jointly with Broadcom- that it would eventually seek to reduce its business with Nvidia. Becoming an investor in Meta should lessen that concern.

But it doesn't look like Nvidia is about to win an exclusive partnership with Meta, like it has with Elon Musk's SpaceX. Meta has already disclosed that Broadcom and fellow chip company Advanced Micro Devices have both indicated an interest in participating in its stock offering. And Broadcom CEO Hock Tan serves as a strategic advisor to Meta's board. Broadcom was shrugging off the news early Tuesday, rising 1.2% in the premarket.

Right now Meta is the belle of the AI ball and that means Nvidia, Broadcom and AMD all are likely to have to pay up in order to stay on its good side.

 

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