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Nvidia's supremacy, however, doesn’t come without risk. A major vulnerability lies in its dependence on the Taiwan Semiconductor Manufacturing Corporation (TSMC), which produces 99% of the semiconductors crucial for AI development. The complexity of global politics, particularly concerning Taiwan and China, poses a significant threat to Nvidia's supply chain.
While historically Nvidia has been the preferred choice for AI chips, the landscape is shifting. Major players within the tech industry are increasingly developing in-house alternatives to reduce reliance on Nvidia. This evolving dynamic raises concerns about sustaining market dominance in the face of emerging competitors.