AMD Shares Fall 8% as Elon Musk Commits to Nvidia Chips for SpaceX

AMD shares dropped 8% after Elon Musk announced SpaceX will use Nvidia chips, dealing a blow to the chipmaker's efforts to challenge its rival in the AI accelerator market.

The decision underscores Nvidia's continued dominance in high-performance computing for AI workloads, even as AMD has ramped up development of competing products. SpaceX's commitment represents a high-profile enterprise win for Nvidia and a visible setback for AMD's datacenter strategy.

AMD has positioned itself as the primary alternative to Nvidia in AI infrastructure, but major customer wins remain critical to closing the gap. The 8% sell-off suggests investors view SpaceX's chip selection as a meaningful competitive signal, particularly given Musk's influence across multiple technology sectors including Tesla and xAI.

The decline adds pressure on AMD ahead of its next earnings report, where management will need to demonstrate traction with other hyperscale customers to offset concerns about market share in AI training and inference workloads.