A slowdown in artificial intelligence development might seem like bad news for AI chip stocks in general. However, Nvidia could end up being the best positioned chipmaker if this slowdown happens.
Over the weekend, leaders from major AI labs Anthropic and OpenAI said that AI development should slow down. The CEO of OpenAI also said the company probably will not go public this year.
Nvidia shares dropped almost 3% in premarket trading on Monday. Other chip companies like Broadcom fell more than 3%, and Advanced Micro Devices also saw a sharp decline.
A slowdown led by Anthropic and OpenAI would bring real risks for Nvidia. It could lower chip demand from two of its biggest customers and delay or reduce the financial gains Nvidia hopes to get from their public listings. Earlier this year, Nvidia invested $30 billion in OpenAI at a $730 billion valuation. Last year, it also agreed to invest up to $10 billion in Anthropic, valuing the company at about $350 billion. If either company delays its public offering, it would be a setback for Nvidia.
At the same time, Nvidia has been trying to depend less on just a few big customers. It supports the wider AI community, invests in startups, and backs open-source AI models that anyone can use and change. This is different from the closed approach of OpenAI and Anthropic. Nvidia also recently agreed to buy the open-source AI platform Hugging Face for $12.9 billion.
Nvidia also has other big customers who probably will not be affected by a slowdown among top AI labs. SpaceX, led by Elon Musk, is one example. Over the weekend, Musk said he supports a slower pace for AI development but did not make any firm promises. He also said on Sunday that he is confident SpaceX will launch Nvidia-powered AI servers into space next year. Musk has said before that SpaceX plans to use only Nvidia hardware for its space data centers. This would help avoid the land and power limits that affect AI infrastructure on Earth, though some people doubt if this plan will work in the long run.
If SpaceX keeps moving forward with its Nvidia-powered space computing plans and open-source developers continue to use Nvidia hardware, this demand could help balance out any slowdown from Anthropic and OpenAI.
