The Motley Fool, founded in 1993, is a financial services company dedicated to making the world smarter, happier, and richer. With its premium investing solutions, free guidance and market analysis on Fool. com, top-rated podcasts, and non-profit The Motley Fool Foundation, The Motley Fool reaches millions of people every month. Its mission is to make the world smarter, happier, and richer. Access to the article requires membership to The Motley Fool's Premium Investing Services. Join today to get instant access to top analyst recommendations, in-depth research, investing resources, and more. Learn more about how Nvidia's stock price has quadrupled over the past three years, driven by the rapid expansion of the AI market and its data center GPUs being used for complex AI tasks. Meta, along with OpenAI and Microsoft, has been a major customer of Nvidia, making substantial purchases of its data center GPUs.

Meta CEO Mark Zuckerberg recently announced plans to install 350, 000 of Nvidia's top-tier H100 GPUs in its data centers by the end of 2024, signaling a significant investment of approximately $8. 8 to $10. 5 billion. This investment is seen as a positive move for Nvidia, indicating the continued growth of its data center chips business and countering concerns of new competitors entering the AI market. While Meta's GPU purchases strengthen Nvidia's position, they also raise questions about Meta's future as it continues to invest heavily in its Reality Labs segment. Meta's revenue growth has been driven by Chinese e-commerce marketplaces, but increased spending on data centers and Reality Labs could impact its operating margin. However, in the long term, Meta's investments in data centers could enhance the effectiveness of its AI algorithms and reduce its dependence on third-party data sources like Apple. The commitment between Meta and Nvidia signifies Nvidia's stronghold in the AI market and benefits both companies, with Nvidia initially experiencing more sales growth while Meta's near-term margins may be affected. Notably, board members of The Motley Fool include individuals affiliated with Meta Platforms, Amazon, Alphabet, and Apple, while The Motley Fool itself has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia.