Nvidia's New Growth Driver: A Broadening Class of AI Buyers
Nvidia's latest earnings report revealed that its largest data center customers are public cloud providers Amazon, Microsoft, and Google. These companies still account for a significant portion of Nvidia's GPU sales, but a new category is emerging as a key growth driver.
According to the report, Nvidia's AI Clouds, Industrial, and Enterprise group (ACIE) grew faster than its hyperscaler business in the second quarter. This group includes AI natives, enterprises, sovereign customers, and specialist clouds that sit between hyperscalers and data centers.
The ACIE group generated $40.3 billion in revenue during the second quarter, a 25% increase from last quarter and 138% year-over-year growth. In contrast, hyperscale customers, which primarily include Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP), generated $48.7 billion in revenue.
While big tech is still the largest buyer of Nvidia's systems, it is no longer the fastest-growing segment. This shift changes how we read the AI story, as demand is moving beyond a small cohort of platform businesses to a broader class that needs generative models for production use cases, not just for platform differentiators.
The growth of ACIE customers dampens the AI bubble argument, as it shows that demand is expanding beyond hyperscalers. A new class of buyers means the capex supercycle is developing a second demand curve, which can lead to infrastructure booms creating new industries.