The battleground for AI dominance is shifting from software to hardware. As of 2026, NVIDIA, AMD, and Microsoft are engaged in an unprecedented investment race in the high-performance computing chip market. Alphabet plans to invest up to $185 billion in AI infrastructure this year, Bloomberg reports. This significantly exceeds investor expectations.
NVIDIA entered the AI weather forecasting market on January 15th by unveiling the Earth-2 open model family. The explosive growth in demand for large-scale scientific computing, such as climate simulations, has established high-performance chips as essential infrastructure. Microsoft hasn’t been idle either. On January 26th, TechCrunch reported that they announced their next-generation AI inference chip, Maia 200, accelerating their own silicon development. There’s a clear trend of cloud companies designing their own chips to reduce their reliance on NVIDIA.
At CES 2026, AMD unveiled the Ryzen AI 400 series, targeting the edge device AI chip market. With real-time AI processing becoming possible on PCs and mobile devices, competition is intensifying in both data center and edge chip markets. Demand has exploded, especially from scientific research institutions and pharmaceutical companies, which are massively adopting large computing chips for new drug development and protein folding prediction. Existing CPUs are simply too slow to be practical.
The hardware competition is expected to intensify further for the foreseeable future. As AI models become larger, both training and inference require enormous computational resources. Only companies with their own chips can gain an advantage in cost efficiency and performance optimization. Gartner predicts that 70% of large cloud providers will operate their own AI chips by 2027. Silicon innovation has become as crucial a competitive edge in the AI era as software innovation.
FAQ
Q: Why are cloud companies making their own chips?
A: To reduce reliance on NVIDIA chips and cut costs. They can also ensure performance optimization and supply chain stability with their own chips.
Q: What are high-performance computing chips?
A: Specialized chips that rapidly process complex scientific calculations such as climate simulations, new drug development, and protein folding. They have superior parallel processing capabilities compared to GPUs.
Q: Can AMD survive the competition?
A: There are opportunities in the edge device AI chip market. While NVIDIA dominates the data center, AMD has competitiveness in PCs and mobile devices.