In a move that appears to counter Sundar Pichai's company, Meta and NVIDIA have officially announced an expansion of their multi-year, multi-generation strategic partnership. This development comes three months after exclusive reports indicated Meta was in discussions to spend billions on Google's Tensor Processing Units (TPUs) for its data centers. Meta has long been a significant customer of NVIDIA, and this new agreement reinforces that relationship with a commitment to purchase millions of additional NVIDIA AI chips, along with other processors and equipment.
It remains unclear whether this new agreement precludes Meta from simultaneously purchasing Google TPUs. Given Meta's aggressive expansion plans for its AI data center infrastructure, it is entirely possible for the company to procure chips from both suppliers. However, it is reasonable to speculate that news of Meta's interest in Google's chips may have prompted NVIDIA to intensify its sales efforts toward the parent company of Facebook, potentially including offering discounts. The specific terms of the agreement have not been disclosed, making it uncertain if this announcement represents procurement beyond what Meta had originally planned.
Regardless, the news has bolstered investor confidence in NVIDIA. Shares of the AI chip leader closed up 1.2% and gained an additional approximately 1% in after-hours trading.
In a surprising twist, a toilet manufacturer is being labeled an "underestimated and overlooked AI-related stock." According to the Financial Times, an activist investor described Toto in precisely those terms. Beyond its well-known bathroom fixtures, Toto also produces high-precision ceramic components for semiconductor manufacturing equipment, including electrostatic chucks. The report suggests these components are becoming increasingly critical in chip manufacturing, particularly for memory chips, which are experiencing surging demand fueled by the AI boom.
Meanwhile, attempts by software companies to reassure nervous investors appear to be having limited effect. For instance, ServiceNow filed a document with the SEC stating that its CEO, Bill McDermott, along with several other executives, had cancelled plans to sell company shares in the future. While this demonstrates a commitment, it is perhaps not surprising given that ServiceNow's stock has nearly halved over the past year. In a more substantive move, the company also announced that McDermott has committed to purchasing $3 million worth of company stock by the end of the month. However, this show of confidence failed to impress the market, as ServiceNow's stock still fell 1% on Tuesday.
The corporate drama surrounding Warner Bros. Discovery (WBD) resumed headlines. After weeks of quiet, WBD announced it has given Paramount and Skydance Media one week to submit a "best and final offer." WBD has a preliminary agreement with Netflix for the latter to acquire its studio and streaming assets, while Paramount has proposed acquiring the entire company. WBD stated that Paramount has offered to increase its bid by $1 per share to $31. Concurrently, WBD is applying pressure by scheduling a shareholder vote for March 20 to approve the deal with Netflix. This saga is far from over. Netflix shareholders are likely eager for a resolution; the company's stock has plummeted 37% since rumors of a WBD acquisition emerged in October, recently hitting its lowest level of 2024 at $77.
In other news: - Thrive Capital announced the close of a new $10 billion fund, with $1 billion allocated for early-stage investments and $9 billion for growth-stage investments. - Palo Alto Networks announced plans on Tuesday to acquire Israeli cybersecurity startup Koi. - Activist investment firm Starboard Value stated it will nominate a new slate of directors to Tripadvisor's board, criticizing the travel review platform for being too slow to respond to the threat of AI chatbots and to integrate generative AI. - Gemini, the cryptocurrency exchange founded by the Winklevoss twins, announced the departure of three executives on Tuesday. The company's stock has declined significantly since its IPO last September. - Venture capital firm Benchmark announced it has hired Jack Altman, founder of early-stage investment firm Alt Capital and HR software company Lattice, as its fifth general partner.