The word of the week on Wall Street, so far: moat. Yes, that moat — of the medieval liquid fortress variety.

The artificial intelligence chip designer Nvidia overtook Microsoft Tuesday to become the most valuable company in the world, although today it lost that title.

Big breaking news here: It’s not easy to compete against one of the richest companies in the world.

“It is hard. It is a fantastic company, it is very well run,” said Sid Sheth, co-founder of d-Matrix, an AI chip startup . 

So when he tries to sell big tech companies like Meta on his AI chips, he leans into small — or at least small compared to the $3 trillion dollar gorilla in the room.

“We are a nimble, small company that will work with you. The leverage is a lot more balanced — maybe you at Meta have more leverage than we do, so we’ll be a lot more flexible,” Sheth said.

Right now all the leverage lies with Nvidia. They really are the only game in town for certain types of crucial AI-training chips.

That doesn’t just mean Nvidia can set prices, it can also make it harder for competitors to break into longstanding relationships with Big Tech.

“Yep and why not? They should. If I were them I’d do the same,” Sheth said.

Companies like Amazon and semiconductor firms like AMD have designed their own AI chips.

The problem is, almost all of those chips are physically made by one company — the Taiwan Semiconductor Manufacturing Company.

“And because of Nvidia’s market power, they’re really in the lead position with TSMC to get what they want built,” said Todd Achilles, a public policy lecturer at the University of California, Berkeley.

And built first.

Achilles also said the federal government’s effort to bring chipmaking to the U.S. won’t really help competition all that much.

If this all sounds kind of monopolistic to you, the Biden administration is reportedly looking into Nvidia antitrust issues. But Dan Ives, managing director of equity research at the investment firm Wedbush Securities, doesn’t expect immediate regulation.

“I mean regulatory is essentially going 40 miles per hour in a minivan in the right lane. But the technology is in a Bugatti going 100 in the left lane,” he said.

And there’s no sign the Bugatti is slowing down anytime soon.