Nvidia Pauses Revenue-Sharing Deals with AI Cloud Companies, WSJ Reports
Some employees warned the financing plan could invite antitrust scrutiny as Nvidia sought a share of cloud revenue from customers using its chips.
- On Thursday, Nvidia paused certain deals in a financing initiative offering credit support to AI cloud companies in exchange for revenue shares, the Wall Street Journal reported, citing people familiar with the matter.
- Designed to support small AI cloud firms purchasing expensive hardware, the program faced mounting investor scrutiny in recent months over Nvidia's role in so-called "circular deals" that could artificially inflate demand.
- Under the initiative, Nvidia sought 50 per cent of revenue from cloud providers and dictated that customers could only rent chips to approved buyers, irking potential partners with the extent of control sought.
- Despite the pause, $500 billion in customer financing arrangements and a $105 billion guarantee for an OpenAI data center remain in effect, with Nvidia claiming the model "continues to evolve due to high demand."
- The Journal reported the company stepped back last week but could still revamp the initiative or fold it into another program, as Nvidia officials emphasized persistent high demand for compute access.
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Nvidia pauses AI cloud financing deals amid control, antitrust concerns
By Rajwa Quasim Chipmaker Nvidia paused some deals in a financing initiative that offered credit support to AI cloud companies in exchange for a share of revenue, The Wall Street Journal reported, citing people familiar with the matter. The AI Compute Partnership was a credit program designed to solve a financing problem faced by smaller cloud providers. Under the program, the chipmaker agreed to rent back computing capacity from cloud customers…
Nvidia has paused parts of the revenue-sharing programme it launched in July
Nvidia has halted some of the transactions under the financing programme it introduced eight weeks ago, in which it extends credit to AI cloud companies buying its chips and takes a cut of what those chips later earn, the Wall Street Journal reported on Thursday. The scheme was announced on 1 July, and it does […] This story continues at The Next Web
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