Meta Taps Taiwan Semiconductor To Build AI Chip, Aims To Cut Reliance On Nvidia
Benzinga Rankings provide crucial metrics on any stock at any time. Meta Platforms Inc META is currently in the process of testing its first in-house chip for training artificial intelligence systems. This strategic move is aimed at reducing its dependence on suppliers like Nvidia Corp NVDA and lowering its infrastructure costs to counterbalance the impact of its investments in AI tools to propel growth.
Partnership with Taiwan Semiconductor
Meta has enlisted the services of Taiwan Semiconductor Manufacturing Co TSM to manufacture the chip, as reported by Reuters, citing insider sources familiar with the matter. Meta aims to integrate these chips into its operations by 2026 for training purposes. In 2024, Meta initiated the use of a Meta Training and Inference Accelerator (MTIA) chip for inference tasks.
Similar to the inference chip, the training chip's initial focus will be on recommendation systems, with plans to expand its application to generative AI products like the Meta AI chatbot. The parent company of Facebook and Instagram has commenced the deployment of a small chip and intends to scale up production for widespread use pending successful testing outcomes. Meta anticipates total expenses in 2025 to range from $114 billion to $119 billion, including up to $65 billion in capital expenditures driven by AI infrastructure investments.
Market Trends and Competition
The AI chip market was valued at $61.45 billion in 2023 and is projected to reach $621.15 billion by 2032, with a compound annual growth rate (CAGR) of 29.4% during the forecast period of 2024-2032. Major tech companies are actively developing in-house chips to reduce their reliance on external suppliers. Notably, OpenAI is nearing the finalization of its first proprietary AI chip design, aiming to decrease dependence on Nvidia. OpenAI is set to achieve commercialization of its chip through Taiwan Semiconductor by 2026.
Apple Inc AAPL has reportedly collaborated with Taiwan Semiconductor to introduce in-house Wi-Fi and Bluetooth chips by 2025. As of the latest check on Tuesday, META stock is up by 1% at $604.00.
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