Moore Threads, a five-year-old graphics processing unit (GPU) developer created by Nvidia's former China chief, aspires to become one of the leading global players in artificial intelligence chip development,

The good news for Nvidia is that it has other segments generating billions of dollars in sales beyond AI-GPUs, which could help cushion the impact if an AI bubble forms and bursts. This makes an 80% or greater decline in its shares unlikely. Nevertheless, a 50% or greater plunge should be expected if history were to repeat itself.

Meta Platforms (NASDAQ:META) caused some ripples in the tech scene when it was reported that Mark Zuckerberg’s tech titan is in discussions with Alphabet (NASDAQ:GOOG) to invest billions of dollars in Google TPUs (Tensor Processing Units) for its data centers by 2027.

Nvidia is reportedly staring down new competition from one of its own customers, but it's not the end of the road for the AI chip leader.

The clearest evidence: According to a recent industry analysis, OpenAI secured roughly a 30% discount on its latest Nvidia hardware order by raising the credible option of shifting more workloads to alternative hardware, such as Alphabet's TPUs. Even when customers stay with Nvidia, Alphabet's presence caps what Nvidia can charge.

Google’s TPUs cannot dethrone Nvidia’s GPUs. But, there is a bigger challenge that can seriously threaten Nvidia’s growth trajectory.