Nvidia Faces Chip Competition While OpenAI Secures Billions

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The US stock market has recently presented a mixed picture, with the Dow Jones Industrial Average reaching a record high on November 11, 2025, fueled by optimism for an end to the government shutdown. This positive sentiment initially boosted tech and AI stocks, with Nvidia climbing 6% and Palantir surging almost 9%. However, the AI sector soon faced headwinds, as concerns over high valuations led to declines for some key players. Nvidia's stock dropped by 2.3% and then nearly 3% after SoftBank Group sold its entire $5.8 billion stake in the chipmaker. This strategic divestment by SoftBank signals a significant shift, as the company is now channeling its resources into OpenAI. SoftBank, which reported a remarkable net income of ¥2.5 trillion ($16.2 billion) in its fiscal second quarter and a record JPY 2.9 trillion for the first half of fiscal year 2025, largely attributes its profits to its AI investments. CEO Masayoshi Son believes OpenAI's future creations will be more valuable than hardware, and SoftBank has already committed $7.5 billion to OpenAI, with plans to invest an additional $20 billion, bringing its total commitment to $40 billion. The demand for robust AI infrastructure remains exceptionally high. Nebius, a cloud computing company, saw its stock jump and revenue increase more than fourfold after securing a $3 billion deal with Meta Platforms Inc. for AI infrastructure. This agreement underscores Meta's dedication to AI development and highlights Nebius's crucial role in providing Nvidia graphics processing units and AI cloud services, especially as major cloud providers like Microsoft and Amazon encounter capacity limits. In contrast, CoreWeave, another AI infrastructure provider, experienced a significant drop of over 14% and then 16% in its shares after lowering its revenue forecast. Its third-quarter operating income margin fell to 4%, missing analyst estimates and prompting some experts, such as Sarah Kunst from Cleo Capital, to suggest a potential 'deflating AI bubble.' Beyond infrastructure, AI-powered tools are also gaining traction. Gamma, an AI tool designed to replace PowerPoint, has achieved a $2.1 billion valuation and $100 million in annual recurring revenue. The company, which has been profitable for over two years with just $23 million in initial funding and a lean 50-person team, assists 70 million users globally in creating over a million presentations, websites, and documents daily. The competition in the AI chip market is intensifying, with AMD aggressively challenging Nvidia. AMD plans to release its MI400 series AI chips in 2026, targeting both scientific computing and generative AI, and will also offer integrated server rack systems, mirroring Nvidia's approach. AMD has also formed a partnership with OpenAI, as experts project global investment in AI infrastructure could surpass $300 billion by 2027. The substantial capital requirements for AI investments are driving a trend towards public listings. Magdalena Heinrich from Bank of America notes that many tech companies are now considering IPOs to raise large amounts of capital more easily than through private markets. OpenAI, currently the world's most valuable private AI company, is reportedly considering an IPO in 2027, signaling a renewed interest in public markets to fund ambitious AI endeavors.

Key Takeaways

The Dow Jones Industrial Average hit a record high on November 11, 2025, but AI stocks like Nvidia and CoreWeave saw declines due to valuation concerns.
SoftBank Group sold its entire $5.8 billion stake in Nvidia to increase its investment in OpenAI, committing an additional $20 billion for a total of $40 billion.
SoftBank reported a net income of ¥2.5 trillion ($16.2 billion) in Q2 and JPY 2.9 trillion for H1 FY2025, primarily driven by its AI investments, especially in OpenAI.
Nebius secured a $3 billion AI infrastructure deal with Meta Platforms Inc., leading to a more than fourfold revenue increase and highlighting high demand for GPU-accelerated computing.
CoreWeave's profit margins dropped to 4% in Q3, missing analyst estimates, and its shares fell over 16% after lowering its revenue forecast, raising concerns about AI valuations.
Gamma, an AI-powered presentation tool, achieved a $2.1 billion valuation and $100 million in annual recurring revenue, demonstrating profitability with only $23 million in initial funding.
AMD is aggressively challenging Nvidia in the AI chip market, planning to release its MI400 series in 2026 and offering integrated server rack systems, with a partnership with OpenAI.
Palantir's stock climbed almost 9% during a period of general tech and AI optimism, contrasting with later dips in other AI stocks.
Large cloud providers like Microsoft and Amazon are facing capacity limits for AI computing, driving demand for specialized providers such as Nebius.
OpenAI, the world's most valuable private AI company, is reportedly considering an IPO in 2027, reflecting a broader trend of tech companies seeking public funding for massive AI investments.

US Stocks Soar on Tech and AI Hopes

US stocks, especially in tech and AI, jumped due to hopes for an end to the government shutdown and strong company earnings. The Nasdaq, S&P 500, and Dow Jones all surged. Nvidia rose 6% and Palantir climbed almost 9%, boosting AI-focused ETFs. S&P 500 companies reported profits more than 12% higher than last year. However, elevated Treasury yields still show some economic caution.

Wall Street Mixed as AI Stocks Dip, Dow Rises

Wall Street saw mixed results as some investors sold AI stocks like Nvidia due to valuation worries. Nvidia dropped 2.3% after SoftBank sold $5.8 billion in shares, and CoreWeave fell over 14% after lowering its revenue forecast. The Dow Jones Industrial Average rose 1.02%, while the Nasdaq declined 0.17%. Hopes for an end to the US government shutdown helped overall market sentiment.

Dow Reaches Record High as AI Stocks Decline

The Dow Jones Industrial Average hit a record high close on Tuesday, November 11, 2025, as lawmakers made progress toward ending the US government shutdown. However, AI stocks like Nvidia and CoreWeave fell due to concerns about their high valuations. SoftBank Group sold $5.8 billion in Nvidia shares, causing the chipmaker to drop almost 3%. CoreWeave's shares slumped over 16% after it lowered its revenue forecast. The S&P 500 climbed 0.21%, but the Nasdaq declined 0.25%.

AI Tool Gamma Reaches $2.1 Billion Value

Gamma, an AI-powered tool designed to replace PowerPoint, now has a $2.1 billion valuation. The company also generates $100 million in annual recurring revenue. Co-founder and CEO Grant Lee stated that Gamma is growing quickly and profitably. It helps users create full presentations from simple text, making design and content faster. This success shows strong demand for AI tools that boost productivity.

Gamma Reaches $2.1 Billion Value and $100 Million Revenue

Gamma, an AI platform for visual storytelling, has reached a $2.1 billion valuation and $100 million in annual recurring revenue. The company has been profitable for over two years with only $23 million in initial funding and a small 50-person team. Gamma helps 70 million users globally create over a million presentations, websites, and documents daily. CEO Grant Lee says Gamma makes it easier for everyone to share ideas, and new funding will help expand the product and team.

Nebius Stock Soars After $3 Billion AI Deal with Meta

Nebius, a cloud computing company, saw its stock jump after signing a major $3 billion deal with Meta Platforms Inc. for AI infrastructure. This agreement will greatly improve Nebius's ability to provide services and grow its presence in the AI market. Meta's investment highlights its commitment to AI development and securing needed resources. Nebius offers GPU-accelerated computing, which is in high demand for AI technology.

Nebius Revenue Jumps After $3 Billion Meta AI Deal

AI cloud company Nebius signed a $3 billion deal with Meta and reported a revenue increase of more than four times. This agreement shows the huge demand for powerful computing needed to build and run AI models. Nebius provides Nvidia graphics processing units and AI cloud services, helping companies grow their AI infrastructure. Both Nebius and CoreWeave are seeing strong demand as even large cloud companies like Microsoft and Amazon face capacity limits.

CoreWeave Profit Margins Drop in Third Quarter

CoreWeave reported lower profit margins in its third quarter, which some experts like Sarah Kunst from Cleo Capital suggest could signal a deflating AI bubble. The company's operating income margin was 4% for the period. This figure missed the average analyst estimate of 6.5% and was lower than the same time last year.

SoftBank Profits Soar from AI Investments

SoftBank reported a surprising net income of ¥2.5 trillion, or $16.2 billion, in its fiscal second quarter. This huge profit boost came from its investments in AI, including a $3 billion stake in Nvidia by March. The company also announced a 4-for-1 stock split for January 1. SoftBank's CEO Masayoshi Son is actively investing in AI and chips, with plans for $20 billion in OpenAI. Analysts believe the company's strong performance is linked to the high value of AI companies.

SoftBank Reports Record Income with Strong AI Focus

SoftBank Group Corp achieved a record high net income of JPY 2.9 trillion for the first half of fiscal year 2025, largely due to its investments in AI, especially OpenAI. The company also acquired ABB Robotics for $5.3 billion and committed $40 billion to OpenAI. ARM, a SoftBank company, reported record revenue and expects 25% growth. SoftBank aims to be the top ASI platform provider within ten years. Despite strong financial growth, the stock price remained unchanged, showing cautious market sentiment.

AMD Boosts AI Chip Plans to Compete with Nvidia

AMD announced an aggressive new strategy to challenge Nvidia in the growing AI chip market. The company plans to release its MI400 series in 2026, targeting both scientific computing and generative AI. AMD will also offer integrated server rack systems, similar to Nvidia's approach for data centers. With strong product plans and partnerships, including one with OpenAI, AMD aims to gain a larger share of the AI infrastructure market. Experts predict global investment in AI infrastructure could reach over $300 billion by 2027.

SoftBank Sells Nvidia to Invest More in OpenAI

SoftBank sold all its shares in Nvidia, a leading AI stock, to invest more heavily in OpenAI, a private AI company. SoftBank has already invested $7.5 billion in OpenAI and plans to add another $20 billion. CEO Masayoshi Son believes OpenAI's future creations will be more valuable than the hardware Nvidia provides. This move is risky, as OpenAI is a private company, but it fits Son's history of making big, bold investments in new technologies.

Tech Companies Consider IPOs for AI Funding

Magdalena Heinrich from Bank of America noted that many tech companies are now looking to go public through IPOs. This shift is driven by the massive capital needed for artificial intelligence investments. Accessing public markets allows companies to raise large amounts of money more easily than private markets. OpenAI, the world's most valuable private AI company, is reportedly considering an IPO in 2027. This trend suggests a renewed interest in public listings for tech firms seeking to fund their AI ambitions.