OpenAI is inching closer to the successful development of its first AI chip technology to compete with Nvidia (NVDA). Nvidia is the current leader in artificial intelligence technology, with its chips demanded by tech manufacturers worldwide. Amid the ongoing AI revolution that has sent tech stocks higher in the last year, NVDA stock has also surged. However, with new competition spurring in 2025, how could that affect Nvidia’s shares?
Nvidia currently dominates the AI market with a share of about 80%. In the last calendar year, its stock is up 85%, and it had a massive 2024 in terms of revenue. However, the artificial intelligence race has been heating up in the past week. Notably, OpenAI’s latest venture is seen as a statement of growing competition. OpenAI’s move to develop its own chips is a sign it is looking to lessen reliance on Nvidia. Other big public tech companies like Microsoft and Apple have been doing the same following Nvidia’s period of dominance last year.
With the AI space getting more competitive, Nvidia’s market share and value will only get weaker, unless it counters with its own development. Following OpenAI’s announcement, Nvidia stock fell slightly before recovering, showing a worry of competition from NVDA investors. This also happened two weeks ago, when China’s DeepSeek AI announced its own new developments to shake up the AI industry. The presence of DeepSeek plummeted the value of Nvidia, however, OpenAI’s announcement hasn’t given that same heavy effect.
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Wall Street still greatly believes in Nvidia, and that has been proven. Agus analyst Jim Kelleher recently told investors that the company remains “unmatched by competitors.” That was in response to the arrival of DeepSeek, which has a significant cost advantage. Yet, if the stock’s movement on Monday says anything, it’s that investors are still betting on NVDA’s benefit. Moreover, all the talk of competition could end up being good for business.
While competition could affect weaker companies, Nvidia’s strength lies in its demand and popularity. It is a Magnificent 7 stock in the US market, making it a premium option. The demand for AI will only grow, thus Nvidia may not be going anywhere for a while.