So far at least, the AI hype has been a rising tide that lifts all boats. But now? Google’s gain is suddenly Nvidia’s drain.

The debut of Google’s flashy new Gemini 3 AI model impressed the industry with capabilities approaching rival products from OpenAI, Anthropic and Meta. Perhaps more importantly, however, is that Gemini was trained on Google’s in-house Tensor Processing Units (TPUs), which look like a cheaper and more efficient alternative to Nvidia’s cutting-edge chipset. And all of a sudden, investors are starting to see the hazy outlines of a new king who, in fact, looks like the old king, dethroned and humiliated by Sam Altman’s Game of Thrones power play.

Have Their Cake and Eat It TPU

After all, it was Google scientists who published a landmark research paper in 2017, called “Attention is All You Need,” which introduced the “transformer” deep-learning architecture that has served as the bedrock of the AI boom. Then came ChatGPT, quickly followed by a freakout that chatbots could kill Google search and, soon after, the rushed debut of Bard, a PR debacle that vaporized $100 billion of Google’s market value in early 2023. Now, even Altman is saying Gemini’s advancements will cause “the vibes out there to be rough for a bit” for OpenAI, according to a memo seen by The Information.

Even worse vibes, however, are being felt by Nvidia. The successful deployment of the Google TPUs reduces the company’s reliance on Nvidia, obviously. But Google’s steadily growing cloud business, which offers compute power using both its own TPUs and Nvidia’s chips, could cut the legs out from under cloud providers (cough cough, Oracle) that have spent the past year-plus amassing a stockpile of costly Nvidia chips. And already, Google’s TPU business has customers lining up:

• In October, Anthropic announced that it had agreed to buy up to 1 million Google TPUs in a deal valued at tens of billions of dollars. On Monday, The Information reported that Meta is planning to use the TPUs in data centers scheduled to be built in 2027.
• Meanwhile, Google’s cloud business recently reported third-quarter revenue of $15.2 billion. That remains comfortably behind Microsoft’s Azure and Amazon Web Services, but still marks a 34% year-over-year increase.

“Several of our largest inference customers are suddenly asking about TPUs” on Google Cloud Platform, Laurent Gil, co-founder and president of cloud management firm Cast AI, told The Daily Upside. “They view TPUs as both more available and less expensive than competing for [Nvidia] H100 capacity. They see [Google’s TPUs] as a fast path to scale. The catch is the software ecosystem. Nvidia still has an advantage with CUDA [Compute Unified Device Architecture], but TPUs are a real player now.”

Cut Loose: Google is hardly alone in its fight for chip independence. Meta, too, has poured cash into designing chips in-house. Ditto Microsoft and OpenAI. Still, the AI war is far from a zero-sum game … for now at least. “We’re not at the point where we have to worry about who’s winning and who’s losing,” Bernstein senior analyst Stacy Rasgon said on CNBC earlier this week. “The pie is still hopefully getting bigger.”

When analysts said spending is K-shaped, we didn’t know the K stood for Kohl’s.

The department store’s shares spiked as much as 36% yesterday after it posted a surprise profit and raised its guidance for the year. Sales flipped to positive growth last month, helping to deliver net income of $8 million, Kohl’s announced yesterday in its earnings call. Though the company still expects sales to fall as much as 4% for the year, that’s a boost from its previous prediction of 5% to 6%.

The comeback is a promising start to the holiday shopping season for new CEO Michael Bender, who only got the job in a permanent capacity on Monday. After years of floundering, the company’s turnaround plan could be taking effect.

Building on Meme-mentum

Kohl’s stock hit an all-time low in April, but then it caught the attention of Reddit’s retail traders. The store’s share price surged over the summer as traders piled in, many of them in short positions as they prepared to profit from a rapid rise and fall. The stock has since more than doubled from its April low, but it’s still down more than 60% from 2022.

Kohl’s had a record earnings year in 2021, but it fell into the bargain bin afterward and has been trying to climb back out since:

• Kohl’s was far from the only department store to suffer in recent years as Amazon, Walmart and Target won over shoppers. Sears, JCPenney, Neiman Marcus, Barney’s and others all filed for bankruptcy. To fend off activist investors pressuring Kohl’s to go private and escape a similar fate, the company began its “complete reinvention.”
• Amid its attempted comeback, Kohl’s went through three CEOs. Bender, its fourth chief in four years, was named permanent CEO this week after serving as the interim chief since May; he replaced Ashley Buchanan, who was ousted following a scandal. Bender’s plan focuses on expanding the store’s selection of jewelry, private-label brands and beauty products via its Sephora partnership.

Saving Kohl’s Cash: Kohl’s is the largest US department store chain by number of retail locations, with more than twice as many as Macy’s. Its turnaround plan has included cost-cutting measures, such as closing underperforming stores and slashing 10% of its corporate workforce. With Deloitte predicting shoppers will spend 10% less this holiday season and PwC predicting a roughly 5% drop, Kohl’s could use the padding on its profit margins.

Artificial intelligence can do a lot of things. Getting us on an exercise bike doesn’t appear to be one of them.

Sales are slow for Peloton’s AI-powered equipment that launched in October, according to Bloomberg, which cited managers at dozens of Dick’s Sporting Goods and Johnson Fitness & Wellness locations, the main spots where shoppers can buy Peloton products in person. Customers have been kicking the tires on the new treadmill and bike, but they’re not buying them.

Fingers Crossed

It’s a tough break for the former pandemic darling. Peloton’s sales and stock price surged in 2020 and 2021 as SoulCycle studios and gyms across the country closed. But what followed was a years-long struggle to succeed once people were allowed to exercise outside of their homes again. The launch of Peloton IQ with AI-enabled personalized guidance and the refresh of Peloton’s entire product lineup via the new Peloton Cross Training Series were meant to usher the company into, in its own words, a “new era.”

But Peloton’s warehouse movement remained slow in early November, according to the Bloomberg source. Peloton did not respond to The Daily Upside’s request for comment.

Peloton IQ — which was made available to original equipment via a software update as well as to new models — includes a workout generator, movement-tracking camera that counts reps, feedback on form and more. Peloton is hoping that will tempt new buyers:

• The company expects sales to pick up through the holiday shopping season, Bloomberg wrote. Its Black Friday sale includes $700 off the new Peloton IQ-powered bike.
• During its most recent earnings report, the company’s revenue outlook for the current quarter was $665 million to $685 million, beating Wall Street’s expectations. CEO Peter Stern said during a call with analysts at the time that Peloton was “exceptionally well-positioned” as it entered the holiday season, thanks in part to its new equipment and Peloton IQ.

The Price Tag: Part of shoppers’ willingness to try the new equipment in person but hesitancy to buy it could be due to the cost. Peloton raised equipment prices by 11% on average during its recent revamp, and subscription fees jumped by about 19%.