(Bloomberg) — OpenAI\u2019s agreements to buy chips from Advanced Micro Devices Inc. and Broadcom Inc. are demonstrating how much room the artificial intelligence industry has to grow beyond Nvidia Corp.<\/p>\n
Most Read from Bloomberg<\/p>\n
In the two weeks since AMD and OpenAI announced their blockbuster deal, the chipmaker\u2019s stock has soared more than 40%. AMD also landed a major order from Oracle Corp. this week, further juicing its shares. Meanwhile, Broadcom unveiled its own agreement with OpenAI on Monday, sending its shares up 10% in a single session, their best performance since April.<\/p>\n
But Nvidia is languishing, falling 3.5% since the AMD-OpenAI pact became public and underperforming the technology-heavy Nasdaq 100 Index, which is essentially flat.<\/p>\n
\u201cOpenAI clearly can\u2019t rely just on Nvidia,\u201d said Eric Clark, portfolio manager of the Rational Dynamic Brands Fund, which has less than $70 million in assets under management, according to data compiled by Bloomberg. \u201cThey have to do deals with as many people as they can because they have a voracious appetite for computing power.\u201d<\/p>\n
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Of course, none of this is meant to imply that Nvidia is losing its leadership position in AI infrastructure. The chip behemoth remains the 800-pound gorilla in the field, commanding roughly 95% of the total market, according to data from Bloomberg Intelligence.<\/p>\n
But as the industry expands there\u2019s increasing room for more winners. Investors are now piling into those opportunities, giving the stocks a taste of the momentum that has propelled Nvidia over the past few years.<\/p>\n
\u201cAMD and Broadcom already had their irons in the fire, but it does seem like they are getting more and more attention as more money is thrown into this area,\u201d said Kevin Mahn, president and chief investment officer at Hennion & Walsh Asset Management, which has $7 billion in assets under management and owns positions in Nvidia, AMD and Broadcom. \u201cNvidia remains at the hub of the AI ecosystem, everyone else is playing catchup. But that doesn\u2019t mean it is the only company worth investing in.\u201d<\/p>\n
In many ways, OpenAI\u2019s burst of spending is making the operator of ChatGPT the new kingmaker in tech.<\/p>\n
\u201cThe industry really wants a substantive alternative to Nvidia, and it seems like AMD has arrived,\u201d said Jason Tauber, co-manager of the Neuberger Berman Disrupters ETF (NBDS), which has $29 million in assets under management and holds Nvidia, AMD and Broadcom. \u201cThe OpenAI deal was important validation that this is real.\u201d<\/p>\n
OpenAI is hardly the only company throwing around cash and chasing the AI wave. The tech industry is awash in billions of dollars in spending to build the infrastructure to power the technology, as many companies are worried that if they don\u2019t keep up in the burgeoning arms race they\u2019ll fall behind their competitors.<\/p>\n
But while these expenditures are a boon for companies like AMD, Broadcom and Nvidia, they\u2019re also triggering concerns about the health of the AI trade that\u2019s lifted the broader market in the last few years.<\/p>\n
As long as demand continues to outstrip supply, which is the driving force behind many of the deals struck lately, there should be room for multiple players in the space. The trouble is OpenAI is closely held, so it doesn\u2019t have to answer to investors or file quarterly updates on its financial health. As a result, no one really knows how deep its pockets are or when things will start to get tight as it pays up on the more than $1 trillion of commitments it has made through 2030.<\/p>\n
\u201cEveryone should remain highly skeptical about whether OpenAI can deliver on the extraordinary obligations it has taken on,\u201d Michael O\u2019Rourke, chief market strategist at Jonestrading, wrote in a note to clients on Wednesday. \u201cConsidering all the companies involved, each carries significant exposure to OpenAI, and all will face repercussions if problems emerge down the line.\u201d<\/p>\n
That\u2019s a risk investors will need to watch. In the meantime, as long as the spigot of AI cash keeps flowing, Nvidia\u2019s competitors like AMD and Broadcom will continue to bring opportunities to diversify away from the biggest player.<\/p>\n
\u201cThe sense of competition and other companies winning deals is very much welcome,\u201d Hennion & Walsh\u2019s Mahn said. \u201cInvestors now have more opportunity to not be concentrated in any single name. They can diversify into other chipmakers.\u201d<\/p>\n
Tech Chart of the Day<\/p>\n
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Nintendo Co. has asked suppliers to produce as many as 25 million units of the Switch 2 by the end of March 2026, setting the company up for record first-year sales of a console that\u2019s already reached high-water marks for the global gaming sector.<\/p>\n
Top Tech Stories<\/p>\n
Apple Inc. is preparing to finally launch a touch-screen version of its Mac computer, reversing course on a stance that dates back to co-founder Steve Jobs.<\/p>\n
Oracle Corp. gave its expectations for gross margins for large AI infrastructure projects, easing some of Wall Street\u2019s concerns about the profitability of a crucial new business unit.<\/p>\n
Automakers are bracing for fresh potential chip disruption, with China\u2019s retaliatory export controls on an obscure Dutch supplier threatening to set off a chain reaction that could halt production lines.<\/p>\n
Mark Zuckerberg\u2019s Meta Platforms Inc. is set to seal an almost $30 billion financing package for its data center site in rural Louisiana, marking the final step for the largest private capital deal on record.<\/p>\n
Earnings Due Friday \u00a0 \u00a0 <\/p>\n
–With assistance from Subrat Patnaik and David Watkins.<\/p>\n
(Updates stock moves at market open)<\/p>\n
Most Read from Bloomberg Businessweek<\/p>\n
\u00a92025 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — OpenAI\u2019s agreements to buy chips from Advanced Micro Devices Inc. and Broadcom Inc. are demonstrating how…\n","protected":false},"author":2,"featured_media":232196,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[182,181,129286,507,107621,7904,37246,129287,4321,2474,74],"class_list":{"0":"post-232195","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificial-intelligence-industry","11":"tag-artificialintelligence","12":"tag-assets-under-management","13":"tag-bloomberg","14":"tag-broadcom-inc","15":"tag-kevin-mahn","16":"tag-nvidia","17":"tag-oracle-corp","18":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/232195","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=232195"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/232195\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/232196"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=232195"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=232195"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=232195"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}