Nvidia Pauses Revenue-Sharing Deals Amid Antitrust Scrutiny Fears
Nvidia's stock slipped 1% in after-hours trading on Thursday following a report that the chipmaker had paused some new revenue-sharing deals with AI cloud companies.
The initiative, which was unveiled in early July, offered credit support to smaller AI cloud providers in exchange for a cut of revenue from customers renting the chips. The program, called AI Compute Partnership, aimed to help cloud firms buy Nvidia's systems before they had enough signed customers to borrow against.
Nvidia would sell the hardware and then collect a share of the subsequent rental income. If a provider couldn't fill the machines, Nvidia would rent unused capacity itself. According to Nvidia's quarterly filing, commitments under the program totaled $36 billion and typically last six years.
Some employees had reportedly warned customers that the structure could draw antitrust scrutiny, while others pressed partners to rent capacity only to approved users and spread it among several smaller customers rather than one large tenant. An Nvidia spokeswoman said that the July model 'is still in place and continues to evolve due to high demand.'
Nvidia's Chief Financial Officer Colette Kress told investors on Wednesday that the new revenue stream could add billions of dollars over time, saying 'In this model, we get paid twice, once on the hardware sale and again through the share of rental revenue... This model can expand our addressable market and create a recurring usage-linked revenue stream alongside our core platform revenue.'