Nvidia's Double-Dipping Chip Plan Hits Antitrust Roadblock
Nvidia's $96.22 billion quarterly revenue and 105.85% growth would normally be the main story, but management disclosed a plan to earn a second time on every chip sold to smaller cloud providers.
The mechanism involves guaranteeing or renting unused capacity from these providers, giving lenders the certainty needed to finance hardware purchases.
Nvidia CFO Colette Kress described it as 'a take-or-pay commitment' that provides a minimum revenue guarantee and shares in excess revenue with Nvidia.
On top of this, Nvidia would collect 50% of cloud revenue above the guaranteed floor, essentially earning twice on each sale.
The program was meant to unlock billions in revenue for Nvidia, but internal warnings about antitrust exposure led management to pause it weeks after announcing it.