Technology
Archived — This article has been archived. The information may be outdated.
Nvidia pauses deals seeking 50% AI cloud revenue share
The Indian Express··28 Aug
Nvidia has paused some deals under a financing initiative that offered AI cloud companies credit support for a share of their revenue. The Wall Street Journal reported the pullback. The chip giant stepped back last week but could revive the program later. Under the proposed deals, Nvidia would take 50% of cloud providers' revenue beyond a threshold.
Prism
What It Means For You
- AI cloud startups lose a source of financing support Nvidia had offered in exchange for future revenue, making it harder to fund chip purchases.
- Nvidia's pullback could ease investor concern about circular deals that critics say inflate AI demand artificially.
- Cloud customers no longer face Nvidia's earlier restriction limiting who they could rent its chips to.
What's Happening
- Nvidia had sought to rent back unused compute capacity from cloud customers, guaranteeing them a buyer to make it easier to borrow for chip purchases.
- Some Nvidia employees warned the initiative could draw antitrust scrutiny given the control Nvidia sought over customers' businesses.
- An Nvidia spokesperson said its broader business model 'is still in place and continues to evolve due to high demand'.
Nvidia's AI Financing Web
- Nvidia this month helped arrange $500 billion in financing from major US banks for its customers.
- Nvidia also agreed to guarantee up to $105 billion to help OpenAI lease a massive data center.
- The paused program was announced less than two months ago to support financing needs at small AI cloud firms.
all-news
