Nvidia and AMD invest billions in Meta as AI chip competition heats up

Nvidia shares rose Tuesday after the chipmaker announced a $3 billion investment in Meta Platforms' stock offering, deepening their partnership amid intensifying competition in the AI infrastructure market. Advanced Micro Devices also invested $1 billion in Meta's offering, sending AMD shares up over 5%, while Nvidia gained about 1%. Meta shares fell roughly 1.1%, and Broadcom rose over 3%. The investments come as Meta expands AI infrastructure and develops custom chips, raising questions about how suppliers will compete for its business. Nvidia has previously financed AI startups and data center projects, including guarantees tied to an OpenAI facility. Analysts warn that Meta's in-house chip development could reduce reliance on Nvidia, while broader concerns persist about whether AI spending will generate sufficient returns.