The Rundown — Nvidia vs. Google: Is the AI Chip Race Winner Take All?

Date: November 30, 2025
Host: Zaid Admani
Guest: Adam Kobesi, founder of The Kobesi Letter

Episode Overview

This episode features market analyst Adam Kobesi for a fast-paced discussion about the volatile state of the stock market, the fierce AI chip competition between Nvidia and Google, and how investor sentiment and macro headwinds could shape 2026. Major topics included whether Nvidia has staying power as the world’s dominant AI chip maker, Google’s newfound momentum, risks of top-heavy market concentration, and the economic factors investors should watch.

Key Discussion Points & Insights

1. Market Volatility Driven by Sentiment

• The Current Mood:
  • Adam emphasizes that today’s market swings are dominated by sentiment, particularly around AI.
  • “There’s no bigger driver of price than sentiment… If you look at the AI trade, it really only improved over the last two to three weeks, in my view, especially with those Nvidia earnings. … Sentiment got to the point where you have expectations for earnings… Then if you don’t beat the expected beat, all of a sudden it’s like, all right, is this bubble popping?” (Adam, 01:13)
• Binary “Bubble or Big Thing” Mindset:
  • Investors are split between believing this is a bubble or the “next big thing,” with few holding moderate views.
  • “It’s very hard to find someone in the middle.” (Adam, 01:53)
• Algorithmic Trading Amplification:
  • Automated trading dominates volume, speeding and intensifying reactions.
  • “A majority of market volume now comes from algorithms or automated forms of trading that only emphasizes and amplifies those kind of domino effect type moves…” (Adam, 03:45)

2. Nvidia’s Dominance and Google’s Challenge

• Nvidia’s Massive Lead and Long-Term Bull Case:
  • Despite short-term headwinds and wild swings, Adam believes Nvidia controls roughly 90% of the global AI training compute and cannot satisfy surging demand alone.
  • “Even if another big player gets a small part of that big pie and that pie is growing every single year, I think it’s great… It’s more of a sign that we’re not in a bubble.” (Adam, 06:45)
  • He predicts, “Nvidia will be the first $10 trillion company in the world… It’s a bumpy road higher.” (Adam, 08:27)
• Google’s Surge and TPUs:
  • Google’s custom AI chips (TPUs) gained attention as the company started selling to major players like Meta.
  • Adam acknowledges the threat — “You cannot get comfortable in the AI world… No company is quote unquote safe.” (Adam, 05:32)
  • But he argues innovation is expanding the market rather than leading to a winner-take-all scenario.
  • “The whole TPU versus GPU… is definitely material, it’s definitely worth noting. But again… Nvidia controls 90% of the AI training compute globally.” (Adam, 06:00)

3. Are Recent Market Reactions Overblown?

• On Nvidia’s Stock Falling:
  • Jesus believes recent selloffs in Nvidia (due to Google news, negative tweets, and accounting rumors) are overreactions.
  • “If you look at the numbers, Nvidia is getting cheaper as it goes up. Its forward earnings multiples are only going down… Nvidia is cheaper than Walmart on a forward PE basis.” (Adam, 09:00)
• Could Google Overtake Nvidia?
  • Short-term, possibly, but Adam focuses on “the pie continuing to grow holistically” rather than current rankings.
  • “There’s going to be a lot of fluctuations… but I don’t put too much weight on who’s the biggest right now.” (Adam, 10:10)

4. Concentration & Systemic Risk in Tech

• Are These Companies Too Big?
  • The “Magnificent Seven” (major tech companies) now dominate the S&P 500’s performance.
  • Adam warns it’s not ideal but unavoidable: “The rally is more broad based would be great, but…the large cap companies are really driving most of the output and most of the growth.” (Adam, 12:03)
  • The wealth gap widens as asset owners pull away in the K-shaped economy.
• Trickle-Down Risk:
  • If firms like Meta or Microsoft cut AI capex, it could spark a cascading market selloff and even threaten GDP growth — “A reversal in AI spending could lead to a recession, given how much AI contributes to the future GDP growth.” (Zaid, 14:35)
• Too Big to Fail?
  • Adam sees $600B in annualized capex in big tech, with falling rates: “I don’t necessarily see that as a major headwind… We continue to see S&P heading higher.” (Adam, 15:30)

5. Potential AI Hype Cycle & Debt Risks

• Is a Debt-Fueled Blowup Possible?
  • The conversation explores if a future borrowing binge (e.g., Meta raising $2T) could finally signal a bubble.
  • Adam’s view: As long as demand, investment, and revenues are there, high spending is justified — but watch for hype with “no path to profitability.” (16:16–17:18)
• Government Demand & Structural Shifts:
  • Massive AI and energy demand, coupled with government investment, marks a real, not speculative, shift.

6. Macro Headwinds for 2026

• Federal Reserve Uncertainty:
  • The Fed’s balancing act (stagflation: hot inflation, weak labor) is the key macro concern.
  • Geopolitical risks (tariffs, possible government shutdowns) remain mild but episodic.
  • "2026 will be the year of the Fed. I think earnings will continue to be in the spotlight... the headwind there could be expectations rise too high.” (Adam, 18:15, 17:55)
• Tariffs & Inflation:
  • Tariffs cause short downturns but are “generally a great buying opportunity.” Inflation from tariffs tends to be “a one-time inflationary type of hit” with brands splitting the cost with consumers. (Adam, 21:05)
  • “Not something that leads to a surge in inflation back to 6 or 7% CPI or anything unless tariffs continue to rise.” (Adam, 21:37)

7. Federal Reserve Policy Outlook

• Rate Cut Expectations:
  • Adam expects a December 25 bps rate cut, with more possible in 2025–2026.
  • The Fed faces its “worst nightmare,” forced to choose between employment and inflation.
  • Rising underemployment, youth unemployment, and lagging wage growth signal more weakness than headline numbers show.
  • “Unemployment's above, you know, close to 4, near 4.5%... Underemployment’s near 9%. … One in ten college graduates is now unemployed… That’s above the 2008 high.” (Adam, 23:08–23:18)
• Asset Holders Win:
  • Rate cuts may fuel markets but worsen the wealth divide: “This will actually only fuel the K shaped economy… leave people who don't own assets behind.” (Adam, 24:09)

Notable Quotes & Memorable Moments

• “There’s no bigger driver of price than sentiment… There's this binary nature and polarity of market sentiment between is this a bubble or is this the next big thing.” (Adam, 01:13)
• “Nvidia will be the first $10 trillion company in the world.” (Adam, 08:27)
• "No company is quote unquote safe." (Adam, 05:32)
• “Markets have evolved into their most reactionary and hypersensitive form in history.” (Adam, 03:17)
• "If you look at the numbers, Nvidia is getting cheaper as it goes up… cheaper than Walmart on a forward PE basis." (Adam, 09:00)
• “The Magnificent Seven are driving most of the output and growth… the wealth gap gets wider… own assets or be left behind.” (Adam, 13:30)
• “I think, look, we’re really in some of the most exciting times ever for investors. I know people don’t always love the volatility, but for me, that’s what keeps me going.” (Adam, 25:28)

Timestamps for Key Segments

• [01:01] — Market volatility is sentiment-driven
• [03:16] — Headlines, algorithmic trading, and market hypersensitivity
• [04:55] — Google’s AI chips (TPUs) and market response to competition
• [07:44] — Nvidia's current selloff: overreaction or fair concern?
• [08:27] — "Nvidia will be the first $10 trillion company"
• [12:01] — Market top-heaviness: should investors worry about concentration?
• [14:14] — Systemic risks if AI capex slows or contracts
• [15:07] — Interdependence of big tech and potential trickle-down effects
• [16:08] — When does the AI trade become too bubbly?
• [17:37] — Macro headwinds for 2026: Fed, inflation, tariffs
• [22:06] — Rate cut expectations and why the Fed is "forced” to act
• [23:08] — Under-the-surface labor market weakness

Tone and Style

• Conversational, engaging, and sometimes urgent—reflective of today's volatile investing environment.
• Adam combines data-backed analysis with direct, memorable statements that quickly convey big-picture ideas.

Summary Takeaways

• Nvidia still has the strongest position in AI chips but expect fierce competition and big swings.
• Market reactions are prone to hype and panic, but the long-term secular growth story for both Nvidia and Google is intact.
• Concentration at the top is a reality and brings risk, but also opportunity for asset owners.
• Macro headwinds (Fed, inflation, tariffs) will create more volatility, with rate cuts likely fueling further asset rallies and widening inequality.
• Innovation and competition in AI are expanding the market, not popping a bubble—at least for now.

For deeper insights, Adam Kobesi and The Kobesi Letter can be followed for ongoing market commentary.