Nvidia's New Buyer Class Outpaces Hyperscalers in Second Quarter

Nvidia's latest earnings report shows that its AI Clouds, Industrial, and Enterprise group grew faster than its hyperscaler business in the second quarter.

This growth is significant because it indicates that a new category of buyers is emerging, one that is outgrowing Microsoft, Google, and Amazon, which have traditionally been Nvidia's largest customers.

The hyperscalers, which include public cloud providers such as AWS, Azure, and GCP, still account for a large portion of Nvidia's GPU sales, but they are no longer the fastest-growing segment.

Nvidia's data center revenue reached $89 billion in the second quarter, up 18% from the prior quarter and 117% year-over-year. The AI Clouds, Industrial, and Enterprise group generated $40.3 billion in revenue, an increase of 25% from last quarter and 138% year-over-year.

This growth is a sign that demand for Nvidia's systems is expanding beyond the hyperscalers to a broader class of buyers, including enterprises, sovereign governments, and specialist clouds.