Nvidia Hits Pause on Aggressive AI Financing Deals Amid Antitrust Fears

Nvidia is rethinking its major AI strategy after internal concerns were raised about potential antitrust scrutiny. According to The Wall Street Journal, Nvidia employees expressed worries that the company's revenue-sharing financing deals with AI cloud providers could give it too much control over customers.

The proposed agreements would have seen Nvidia receiving 50% of revenue generated above certain thresholds. However, Nvidia has reportedly paused some of these deals due to internal concerns about how much control the company can exert over customers participating in the program.

Nvidia had sought restrictions on who cloud providers could rent its chips to and preferred that capacity be distributed among multiple smaller customers. This exposure is substantial, with commitments under Nvidia's new AI-cloud business model totaling $36 billion as of July 26.

The company also held $99 billion in equity investments and another $25 billion in equity investment commitments. Nvidia can participate in revenue generated by AI-cloud partners when certain conditions are met. The development matters because Nvidia is increasingly doing more than simply selling GPUs.