Don't Worry, AI Investors, the Artificial Intelligence Boom Is Still on -- But There Are Rising Dangers for Nvidia

Core Viewpoint - Despite the ongoing AI boom, AI stocks have faced significant declines in 2025 due to tariff threats and economic recession concerns, leading to questions about the sustainability of massive AI investments by tech companies [1][2]. Group 1: AI Market Dynamics - The AI revolution appears resilient even amid market turmoil, with CEOs from major companies confirming strong demand for AI [3]. - Alphabet plans to invest $75 billion in AI data centers this year, with positive returns already being reported [4]. - Amazon's CEO emphasized that generative AI will transform customer experiences and noted triple-digit growth rates in AI revenues [6]. Group 2: Competitive Landscape - The introduction of China's low-cost AI model, DeepSeek R1, has added pressure on AI stocks, particularly Nvidia [5]. - Amazon and Google are actively working to reduce AI costs, with Amazon's Trainium2 chip offering 30%-40% better price performance compared to Nvidia's offerings [12]. - Google's new Ironwood chip is designed for high performance, capable of handling six times the memory of previous generations and achieving peak inference throughput of 4,614 teraflops [14]. Group 3: Nvidia's Position - Nvidia has a significant market lead in AI chips, but its high gross margins (75%) may be challenged as competitors like Amazon and Google develop their own chips [15]. - The competitive landscape is shifting, with both Amazon and Google aiming to lower AI costs and reduce reliance on Nvidia [16].