Jensen Huang, NVIDIA founder and CEO, has a Q&A session at a press conference during the APEC CEO summit on October 31, 2025 in Gyeongju, South Korea.

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Nvidia shares fell on Tuesday after The Information reported that Meta is considering using chips designed by Google.

Shares of Nvidia fell as much as 7% before recovering to trade down 4.3% later in the day. Google parent Alphabet was 4.2% higher after a more than 6% rally on Monday.

On Monday, The Information reported that Meta is considering using Google’s tensor processing units, or TPUs, in its data centers in 2027. Meta may also rent TPUs from Google’s cloud unit next year, the publication reported.

“Google Cloud is experiencing accelerating demand for both our custom TPUs and NVIDIA GPUs; we are committed to supporting both, as we have for years,” a Google spokesperson told CNBC.

Google launched its first-generation TPU in 2018 and it was initially designed for its own internal use for its cloud computing business. Since then, Google has launched more advanced versions of its chip that are designed to handle artificial intelligence workloads.

TPUs are a customized chip and experts say this gives Google an advantage over rivals as it can offer customers a highly efficient product for AI.

If Meta uses the TPUs, it would be big win for Google and potential validation of the technology.

Shares of Broadcom, which helps Google design its TPUs, were up more than 1% on Tuesday after an 11% rise the day before.

Nvidia remains the market leader with its graphics processing units, GPUs, that have become the main piece of hardware underpinning the huge AI infrastructure build-out. While Nvidia’s dominance is unlikely to be dislodged in the near term, Google’s TPUs add further competition into the AI semiconductor market.

Shares of Advanced Micro Devices, previously seen as offering the most credible challenger to Nvidia’s GPUs, were trading 6% lower on Tuesday. Chip designer Arm’s shares fell 4.2%.

“There was some sense that [AMD] could be the number two [in the market] and now it’s become clear that there may not be room for that,” Gil Luria, head of technology research at D.A. Davidson, told CNBC.

Companies building AI infrastructure have been searching for a more diversified supply of chips to reduce reliance on Nvidia.

Meta is among the biggest spenders on AI infrastructure, with the company projecting its capital expenditures to stand between $70 billion and $72 billion this year.

The share price moves come amid continued debate around whether there is an “AI bubble” and stretched tech company valuations.

Nvidia has been central to the debate and the company last week reported a stronger-than-expected sales forecast for the current quarter but technology stocks fell after.

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A logo of the Taiwan Semiconductor Manufacturing Company (TSMC) displayed on a smartphone screen

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The Trump administration is pushing Taipei to shift investment and chip production to the U.S. so that half of America’s chips are manufactured domestically, in a move that could have implications for Taiwan’s national defense. 

Washington has held discussions with Taipei about the “50-50” split in semiconductor production, which would significantly reduce American dependence on Taiwan, U.S. Secretary of Commerce Howard Lutnick told News Nation in an interview released over the weekend. 

Taiwan is said to produce over 90% of the world’s advanced semiconductors, which, according to Lutnick, is cause for concern due to the island nation’s distance from the U.S. and proximity to China. 

“My objective, and this administration’s objective, is to get chip manufacturing significantly onshored — we need to make our own chips,” Lutnick said. “The idea that I pitched [Taiwan] was, let’s get to 50-50. We’re producing half, and you’re producing half.” 

Lutnick’s goal is to reach about 40% domestic semiconductor production by the end of U.S. President Donald Trump’s current term, which would take northwards of $500 billion in local investments, he said. 

Taiwan’s stronghold on chip production is thanks to Taiwan Semiconductor Manufacturing Co., the world’s largest and most advanced contract chipmaker, which handles production for American tech heavyweights like Nvidia and Apple. 

Taiwan’s critical position in global chips production is believed to have assured the island nation’s defense against direct military action from China, often referred to as the “Silicon Shield” theory.

However, in his News Nation interview, Lutnick downplayed the “Silicon Shield,” and argued that Taiwan would be safer with more balanced chip production between the U.S. and Taiwan.

“My argument to them was, well, if you have 95% [chip production], how am I going to get it to protect you? You’re going to put it on a plane? You’re going to put it on a boat?” Lutnick said. 

Under the 50-50 plan, the U.S. would still be “fundamentally reliant” on Taiwan, but would have the capacity to “do what we need to do, if we need to do it,” he added.

Beijing views the democratically governed island of Taiwan as its own territory and has vowed to reclaim it by force if necessary. Taipei’s current ruling party has rejected and pushed back against such claims. 

This year, the Chinese military has held a number of large-scale exercises off the coast of Taiwan as it tests its military capabilities. During one of China’s military drills in April, Washington reaffirmed its commitment to supporting Taiwan. 

More in return for defense

Lutnick’s statements on the News Nation interview aligned with past comments from Trump, suggesting that the U.S. should get more in return for its defense of the island nation against China. 

Last year, then-presidential candidate Trump had said in an interview that Taiwan should pay the U.S. for defense, and accused the country of “stealing” the United States’ chip business. 

The U.S. was once a leader in the global semiconductor market, but has lost market share due to industry shifts and the emergence of Asian juggernauts like TSMC and Samsung. 

However, Washington has been working to reverse that trend across multiple administrations. 

TSMC has been building manufacturing facilities in the U.S. since 2020 and has continued to ramp up its investments in the country. It announced intentions to invest an additional $100 billion in March, bringing its total planned investment to $165 billion. 

The Trump administration recently proposed 100% tariffs on semiconductors, but said that companies investing in the U.S. would be exempt. The U.S. and Taiwan also remain in trade negotiations that are likely to impact tariff rates for Taiwanese businesses. 

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iPhone Air is the big newcomer among Apple’s latest lineup that went on sale Friday, but inside the slim phone’s raised plateau is another new piece of hardware that signals a renewed focus on artificial intelligence. 

Apple’s custom A19 Pro chip introduces a major architecture change, with neural accelerators added to each GPU core to increase compute power. Apple also debuted its first ever wireless chip for iPhone, the N1, and a second generation of its iPhone modem, the C1X. It’s a move analysts say gives Apple control of all the core chips in its phones.

“That’s where the magic is. When we have control, we are able to do things beyond what we can do by buying a merchant silicon part,” said Tim Millet, Apple vice president of platform architecture. He sat down with CNBC at Apple Park in September for the first U.S. interview about the new chips.

Until now, Broadcom was the main provider of wireless and bluetooth chips for iPhones, although Apple has made networking chips for the AirPods and Apple Watch for nearly a decade. Apple’s N1 is in the entire iPhone 17 lineup and the iPhone Air.

Arun Mathias, Apple vice president of wireless software technologies and ecosystems, gave CNBC an example of the N1’s improved Wi-Fi functionality. 

“One of the things people may not realize is that your Wi-Fi access points actually contribute to your device’s awareness of location, so you don’t need to use GPS, which actually costs more from a power perspective,” Mathias said. “By being able to do this more seamlessly in the background, not needing to wake up the application processor as much, we can do that significantly more efficiently.”

Apple’s new custom SoC for iPhone, A19 Pro, has neural accelerators added to the GPU cores to prioritize AI workloads

Emily Park

For iPhone modems, Qualcomm has been the sole provider since 2020. That changed in February when Apple unveiled the C1 in the iPhone 16e. It’s a plan first set in motion in 2019, with Apple’s purchase of Intel’s modem business for $1 billion. Qualcomm has long warned investors of the coming change. 

Qualcomm modems remain in the iPhone 17, 17 Pro and 17 Pro Max, but Apple’s C1X is in the iPhone Air. 

“It may not be as good as Qualcomm’s yet, in terms of just overall throughput and performance, but they can control it and they can make it run at lower power. So you’re going to get better battery life,” said Ben Bajarin, CEO of Creative Strategies, a technology research and consulting firm. He expects Apple to “completely phase out” Qualcomm in the “next couple of years.”

Apple’s Mathias said the C1X is “up to twice as fast” as the C1 and “uses 30% less energy” than the Qualcomm modem in the iPhone 16 Pro.

Neither Qualcomm or Broadcom saw much market impact following Apple’s announcement, and both companies will maintain licensing deals with Apple for certain core technologies.

AI accelerators on A19 Pro

Apple’s three new chips come amid increasing pressure from Wall Street about the company’s AI strategy.

“They probably won’t ever have their own Apple model like Google or OpenAI,” Bajarin said. “They’re still going to run those services on iPhone, right? They want the iPhone to be the best place for developers to run their AI.”

Apple has been making its own system on a chip, or SoC, since the A series launched with the iPhone 4 in 2010. The latest generation A19 Pro has a new chip architecture that prioritizes AI workloads, adding neural accelerators to the GPU cores.

“We are building the best on-device AI capability that anyone else has,” Millet told CNBC. “Right now we are focused on making sure that these phones that we’re shipping today, or shipping soon, will be capable of all the important on-device AI workloads that are coming.”

Privacy is a major reason Apple is prioritizing on-device AI, but Millet said there’s another reason, too. 

“It is efficient for us. It is responsive. We know that we are much more in control over the experience,” he said. 

One “built-in AI” feature Millet highlighted is the new front camera that uses AI to detect a new face and automatically switches to taking a horizontal photo. “It’s leveraging a full complement of almost all the capabilities in the A19 Pro,” Millet said.

Apple’s original AI hardware, its Neural Engine, was first unveiled back in 2017. It was barely mentioned at the launch. Instead, it’s all about adding compute power to the GPUs. 

“The integration of the neural processing is reaching MacBook Pro class performance inside an iPhone,” Millet said. “It’s a big, big step forward in ML compute. And so when you look inside the Neural Engine, for example, you have a lot of dense matrix math. We didn’t have that capability in our GPU. But now we do with A19 Pro.”

Bajarin told CNBC that Apple’s neural accelerators may work similarly to the tensor cores on Nvidia‘s AI chips, such as the H100.

“We’re integrating neural processing in a way that allows someone who’s writing a program to one of those small processors, extending the instruction set so they have a new class of computer that they have access to right there, and they can switch back and forth between 3D-rendering instructions and neural-processing instructions, all seamlessly inside the same microprogram,” Millet said.

Apple’s previous generation A19 SoC is in the base model iPhone 17, while the A19 Pro is in the iPhone Air, iPhone 17 and 17 Pro Max.

Apple’s iPhone 17 Pro shown on September 9, 2025 at Apple Park in California has enhanced 3D-rendering capabilities powered by Apple’s custom chip, A19 Pro, with neural accelerators added to the 6 GPU cores.

Katie Tarasov

Following overheating issues in the iPhone 15, a new “vapor chamber” in the Pro models keeps the custom chips cool.

“It’s actually positioned in concert with where the system on a chip, the A19 Pro is positioned,” said Kaiann Drance, Apple’s vice president of worldwide iPhone product marketing. “We think about how that all goes together, including with that forged unibody aluminum design, which is incredibly thermally conductive so that we can effectively dissipate heat with the vapor chamber, with where it’s positioned with our chip. And it’s even laser welded into it, which creates a metallic bond which also helps dissipate heat.”

More chips, more U.S. manufacturing

Apple still relies on others for smaller components, like Samsung for memory and Texas Instruments for analog chips. All bigger core chips, however, may be Apple-designed in every iPhone as soon as next year, according to Bajarin.

“We expect that there would be modems coming to Mac. We would expect there’s modems coming to iPad. There’s probably N variants of the networking chip coming to Mac,” Bajarin said. “I think over the course of the next few years, it will be on all of the portfolio.”

When CNBC asked Apple’s Millet if neural accelerators will be in the GPU cores of M5, the next anticipated SoC for Mac, he said, “We have a unified approach to architecture.”

The iPhone maker plans to manufacture at least some of its custom chips in the U.S., at facilities like Taiwan Semiconductor Manufacturing Company‘s new campus in Arizona, where CNBC got a tour of the first completed fab.

Apple’s A19 Pro is made at the leading edge of TSMC’s 3-nanometer node. While TSMC is working toward 3nm production in Arizona by 2028, it’s not there yet.

“If you need to be on the leading edge, it’s going to be Taiwan for the time being,” Bajarin said. 

In August, Trump announced a 100% tariff on chips from companies not making domestically. That same day, Apple increased its U.S. spending commitment to $600 billion over the next four years. CEO Tim Cook said part of that will go toward creating an “end-to-end silicon supply chain right here in America.”

“There’s really a question of what part of tariffs impact the silicon supply chain,” Bajarin said. “This is obviously why Apple and Tim Cook are on their mission and out there talking about investing in America.”

As part of that plan, Bajain said Apple could give struggling U.S. chipmaker Intel “serious consideration if 14A really does deliver on all of its promises.” Although, he added, it’s “going to be awhile” before Intel “becomes a viable option.”

For now, Apple is committed to making chips at TSMC Arizona.

“We are super excited about TSMC’s push into U.S. manufacturing. Obviously it will help us from a time zone perspective, and we also appreciate that the diversity of the supply is also really important,” Millet said.

When asked if he knows how much of Apple’s $600 billion U.S. spend will go toward custom silicon, Millet said, “I hope it’s a lot.”

Watch the video to see a behind-the-scenes look at Apple’s latest custom silicon.

Kif Leswing contributed to this report.

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The U.S. Commerce Department is conducting a national security investigation into imports of semiconductor technology and related downstream products, according to a Federal Register notice put online Monday. 

The official document — which calls for public comments on the investigation — further confirms that chips and the electronics supply chain will not be excluded from U.S. President Donald Trump’s tariff plans despite his statement on Friday that many of those products were exempt from his “reciprocal tariffs.”

As part of the probe, the Commerce Department will investigate the “feasibility of increasing domestic semiconductors capacity” in order to reduce reliance on imports and whether additional trade measures, including tariffs, are “necessary to protect national security.”

The investigation encompasses a wide range of items, including chip components such as silicon wafers, chipmaking equipment, and “downstream products that contain semiconductors.” 

Semiconductors play a role in essentially every type of modern electronics, giving the investigation massive implications for Trump’s global trade war as he seeks to boost U.S. manufacturing. 

While exemptions have been made on various electronics products, including smartphones, computers and semiconductors, Trump and some officials said over the weekend that the reprieve was temporary and part of plans to apply separate tariffs to the sector.

The semiconductor investigation — first initiated by the secretary of commerce on April 1 — sets the grounds for such tariffs to come into effect. 

The Commerce Department will first allow for public comments on the investigation to be submitted no later than 21 days from Wednesday.

However, on Sunday, Trump reportedly said he will be announcing new tariff rates on imported semiconductors over the next week, and that flexibility will be shown to certain companies. 

On the same day, Commerce Secretary Howard Lutnick told ABC News’ “This Week” that separate tariffs for semiconductors and electronic products were coming in “probably a month or two.” 

Trump’s Commerce Department cited the probe under Section 232 of the Trade Expansion Act of 1962, which can permit the U.S. president to impose tariffs on the grounds of national security.

The justification is being used for a similar investigation on pharmaceuticals and pharmaceutical ingredients, which was also disclosed on Monday.

The U.S. is heavily dependent on semiconductor technology imported from markets like Taiwan, South Korea, and the Netherlands. 

However, for years, Washington has been implementing policies aimed at onshoring more of the semiconductor supply chain, including through industrial policies such as the $280 billion CHIPS and Science Act. 

Nvidia, the chipmaker powering much of the artificial intelligence boom, announced on Monday a plan to design and build factories that, for the first time, will produce NVIDIA AI supercomputers entirely in the U.S.

Last month, Taiwan Semiconductor Manufacturing, the world’s largest chip foundry, announced its intention to increase its existing investments in advanced semiconductor manufacturing in the U.S. by an additional $100 billion.

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