For three years, Nvidia’s dominance in AI chips has been the closest thing to a natural law in tech investing. Then Arista Networks’ CEO Jayshree Ullal casually dropped a bombshell on her earnings call that should make every chip investor sit up.
“A year ago, it was pretty much 99% Nvidia,” Ullal said when asked about her company’s work with AMD. “Today, when we look at our deployments, we see about 20%, maybe a little more, 20% to 25%, where AMD is becoming the preferred accelerator of choice.”
Let that sink in. In roughly 12 months, AMD went from virtually zero to roughly a quarter of Arista’s AI infrastructure deployments. That’s not a rounding error — that’s a tectonic shift happening in real time.
The market noticed. On Friday, Nvidia shares slid nearly 3% while AMD gained about 1%. Not dramatic moves on their own, but symbolic of something larger: the AI chip monopoly narrative is cracking.
Here’s the context that makes this even more interesting. Nvidia has been building its own networking technology — Spectrum-X — to connect its GPUs together, effectively cutting out middlemen like Arista. Meta and Oracle have already adopted Nvidia’s in-house networking. That move hammered Arista’s stock last year, losing more than half its value at one point.
So Arista has been diversifying out of necessity, and AMD has been the beneficiary. AMD’s MI300X accelerators have been gaining traction with hyperscalers and enterprise customers, and the company’s data center revenue is on a tear — up 69% year-over-year in its latest quarter to $3.86 billion.
AMD also just reported earnings that crushed expectations: $1.53 EPS versus the $1.32 consensus, with total revenue up 34% to $10.27 billion. The stock is up 85% over the past year, and its market cap sits around $335 billion — still less than 8% of Nvidia’s $4.5 trillion valuation. That gap alone tells you how much runway AMD has if it continues stealing share.
There’s a catch, though. AMD CEO Lisa Su sold 125,000 shares worth about $26.8 million on February 11, and EVP Forrest Norrod dumped another $4.2 million the same day. Insider selling isn’t always bearish — executives sell for all kinds of reasons — but the timing, right after earnings, is worth watching.
The bigger picture: Nvidia still owns roughly 90% of the AI chip market. AMD clawing out even a few percentage points is material at these scales. And Arista’s Ullal just gave us a real-time data point that the shift is accelerating faster than most analysts expected. For investors watching the AI infrastructure trade, the one-horse race just got a lot more interesting.