As Nvidia hits fresh record highs based on strong sales of its advanced computer chips, Annabelle Miller, principle, investments at ECP Asset Management, says Taiwan Semiconductor Manufacturing Company (TSMC) is the standout investment opportunity in artificial intelligence (AI) computing.

Nvidia recently announced a US$5 billion investment in Intel as a strategic move to allow it entry into the AI data centre market while supporting US government efforts to onshore computer chip production away from Asia. The collaboration combines Nvidia’s accelerated computer chips, or graphics processing units (GPUs) which power AI, with Intel’s central processing units (CPUs), which are the brains behind personal computers. For Intel, the investment essentially provides a much-needed infusion of capital, according to Ms Miller.

“This is not a foundry deal but rather just badly needed US$5 billion in cash for Intel. Intel’s real issue is its small scale, high cost and poor execution of its foundry. This deal ultimately tells us that Nvidia still has a strong preference for TSMCs foundry and technical excellence. Further, it is likely that Nvidia is providing this investment to quell pressure from the US government,” she said.

Ms Miller favours TSMC over Nvidia for the strong growth opportunities the Taiwanese company offers and its strategic position near Asian computer chip suppliers. The company will be a key beneficiary of the growth of the AI infrastructure market, estimated by Nvidia’s Jensen Huang to grow from $600 billion to $3-$4 trillion by 2030. This huge growth will create upside for TSMC’s medium-term revenue growth from 2026, Ms Miller says.

“Our preferred way to invest in AI computing is through TSMC. They’ve got the technological superiority currently and huge expected growth in revenues. TSMC has a 40 per cent five-year CAGR for AI products, but also when you look at their competitive advantages, its geographical concentration in Taiwan and being so close to its suppliers is important too,” she said.

“If TSMC has an outage at a manufacturing facility at 2am in the morning, they can just ring up their supplier which is five minutes' drive away and the problem can be quickly fixed. So, it is these kinds of little nuances that provide us with the comfort that TSMC is the right way to go in terms of investment,” she said.

Ms Miller is less optimistic about Intel, despite Nvidia’s significant investment. “Intel has a lot of struggles to overcome in terms of fixing its foundry business, as evidenced by the fact it outsources a portion of its leading-edge node production to TSMC,” she said.

As for China’s recent ban on Nvidia GPUs and the emergence of competitors in Huawei, DeepSeek and Alibaba, Ms Miller says it is possible that China could catch up to the US and Nvidia in terms of GPU production.

“China's move to ban Nvidia chips as a longer-term strategic move to develop their own industry and move away from reliance on TSMC. You've already seen companies like Huawei claim technologically superiority or at least being in line with Nvidia in their latest AI product roadmap. While it's a war of words at this stage, and the proof will be in the pudding, as we saw earlier in the year with the DeepSeek moment, it's not out of the realms of possibility that China is leaping ahead in the AI race,” she said.

“Either way, whoever wins the end market is going to have to make the majority of their chips with TSMC,” she said.