For three years, Nvidia has owned the AI chip market like a landlord who never gets a complaint. Roughly 90% market share. Zero serious competition. A $4.5 trillion market cap built on GPUs that every tech giant needs and nobody else makes well enough.
Then Arista Networks CEO Jayshree Ullal dropped a number on her earnings call Thursday night that should make Nvidia investors pause. “A year ago, it was pretty much 99% Nvidia,” Ullal said, referring to the accelerator chips used in Arista’s networking deployments. “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.”
Read that again. In twelve months, AMD went from essentially zero presence in Arista’s AI deployments to roughly a quarter of them. That’s not a rounding error — that’s a trend. The market reacted accordingly: Nvidia fell nearly 3% on Friday while AMD gained about 1%.
The backdrop makes this even more significant. AMD just posted a monster Q4 — $1.53 EPS versus the $1.32 analysts expected, on revenue of $10.27 billion versus the $9.65 billion consensus. That’s 34% year-over-year revenue growth. The stock is up 85% over the past 12 months and now commands a $335 billion market cap.
AMD has been partnering with Arista to build customized AI clusters for training and inference workloads. Meanwhile, Nvidia has been building its own networking technology — Spectrum-X — to link its GPUs together, effectively cutting Arista out of the equation. Meta and Oracle have already adopted Nvidia’s in-house networking. So Arista has a natural incentive to help AMD succeed — if Nvidia controls both the chips AND the networking layer, Arista’s relevance shrinks.
None of this means Nvidia is in trouble. A company with 90% market share losing a few points to its closest competitor is called “normal.” But for AMD bulls, Ullal’s comment is validation that enterprise customers are genuinely diversifying their AI infrastructure away from a single supplier. And for anyone who’s been waiting for a crack in Nvidia’s armor — 99% to 75% in one year is worth watching closely.