Could Nvidia Become SoundHound AI's Biggest Competitor?

David Jagielski, The Motley Fool

Wed, Mar 26, 2025, 2:45 AM 4 min read

Voice artificial quality (AI) institution SoundHound AI (NASDAQ: SOUN) got a large boost to its stock terms aboriginal past twelvemonth aft chipmaker Nvidia (NASDAQ: NVDA) disclosed that it had a tiny presumption successful it. As 2024 progressed, further bully quality astir the concern pushed its stock terms higher. But aboriginal this year, AI assemblage headwinds, competitory threats, and a tepid showing astatine CES acceptable the banal connected a downslope.

Then successful precocious February, erstwhile Nvidia filed its latest 13F with the SEC, investors learned that it had sold disconnected its full involvement successful SoundHound AI successful the 4th quarter. Shares plunged further.

Even much concerning, Nvidia precocious locked up a woody with its archetypal edifice company. Not lone is the GPU person nary longer a cardinal backer of SoundHound AI, it whitethorn besides perchance go the smaller company's biggest competitor.

On March 18, Yum! Brands announced that it would beryllium moving with spot elephantine Nvidia successful what it called an "industry-first collaboration" with the tech company. Yum! Brands owns the KFC, Taco Bell, and Pizza Hut chains, giving it a monolithic footprint with much than 61,000 edifice locations passim the world.

The institution is going to usage AI to assistance measure the show of its restaurants and is deploying dependable AI systems to grip orders astatine drive-thrus, which is 1 of the areas that SoundHound has besides been eyeing arsenic a large maturation opportunity. In December, SoundHound announced deals for its dependable AI ordering level with Church's Texas Chicken and Torchy's Tacos.

Nvidia's woody with Yum! Brands marks the archetypal clip the tech elephantine partnered with a edifice institution connected AI, and it could conscionable beryllium the start.

For SoundHound, the large question was ever astir however overmuch maturation it could genuinely achieve. The competitory menace from Nvidia is acold from the lone interest connected that front, arsenic different companies besides connection akin dependable AI services. But due to the fact that of Nvidia's monolithic scale, it could instrumentality important marketplace stock successful dependable AI. It's besides successful a fiscal presumption to propulsion hard into caller markets: It generated $73 cardinal successful nett implicit the past 4 quarters. By contrast, SoundHound is obscurity adjacent breaking adjacent -- it incurred a nonaccomplishment of much than $351 cardinal past year.

While SoundHound doubled its gross during the past 3 months of 2024, that was with the assistance of an acquisition. For it to turn organically astatine a precocious complaint won't beryllium easy. There's loads of contention retired determination successful its niche, and with a behemoth similar Nvidia perchance en way to becoming a immense rival, investors whitethorn privation to deliberation doubly astir conscionable however highly they are valuing the stock.