In extended trading on October 6, Nvidia's quotes were falling at the moment by more than 2%, but then slightly slowed down to -1.5%. Investors were selling off shares of the leading chip maker amid news of a partnership between ChatGPT owner OpenAI and Nvidia's rival AMD. The companies announced a multi-billion dollar agreement to build AI data centers based on AMD processors. Under the terms of the deal, OpenAI will eventually be able to get up to a 10% stake in the chip maker.

"We believe this deal is truly transformative - not just for AMD, but for the entire industry dynamics," AMD executive vice president Forrest Norrod told Reuters in a commentary. For AMD, the agreement was the biggest success in its attempt to gain market share in the AI chip market, The Wall Street Journal noted. Previously, the company was known primarily for its processors for gaming systems, PCs and servers, but in the segment of powerful gas pedals for AI, it has long been inferior to competitors.

But for Nvidia, which is the main supplier of OpenAI, this is one of the most direct and serious challenges to its dominance in the industry, Barron's writes. The company's position as a key AI chip contractor for bigtechs could be at risk, the publication adds. For now, Nvidia remains the preferred supplier of AI chips to tech giants, but it faces increasing competition from almost all sides, the WSJ emphasizes. Major cloud providers Google and Amazon are already developing and selling their own AI chips, and OpenAI recently struck a $10 billion deal with Broadcom to build its own chip for internal use.

A Goldman Sachs analyst, meanwhile, is bullish on Nvidia stock in the coming months. He raised his target price from $200 to $210 (up 12% from the last close), reiterating his Buy advice. The analyst recalled that Nvidia recently entered into a strategic partnership with OpenAI and will invest up to $100 billion in the startup. In his opinion, the agreement with this and other companies will be the catalysts for the growth of quotes of the chipmaker. "We expect near-term strength in Nvidia's fundamentals due to increased demand from both hyperscale customers and non-traditional buyers. Hyperscale revenues will continue to dominate the company's revenue mix," the analyst said in a note cited by CNBC.

This article was AI-translated and verified by a human editor

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