Nvidia Halts Revenue-Sharing Deals with AI Cloud Firms Amid Antitrust Concerns

Chip manufacturing giant Nvidia has reportedly paused a new financing initiative that aimed to provide credit support to artificial intelligence cloud companies. The program, launched in July, involved Nvidia receiving a share of the companies' revenue in exchange for financial assistance, in addition to revenue from chip sales.

The Wall Street Journal reported that the pause came after some Nvidia employees expressed concerns to customers about the initiative potentially drawing antitrust scrutiny. The company stepped back from the program last week, though it may be revamped or integrated into another initiative. Nvidia stated that the "new business model" remains in place and continues to evolve due to high demand.

The program was designed to help AI cloud firms finance the purchase of Nvidia's expensive chips. A key component of the initiative was Nvidia's ability to rent back compute capacity if its cloud customers were unable to sell it. This arrangement, however, reportedly caused sensitivities among potential partners regarding the extent of control Nvidia sought.

According to the report, Nvidia dictated terms such as limiting chip rentals to approved customers and favoring distribution among multiple smaller AI firms over a single large client. These conditions apparently irked some potential partners in the early weeks of the program, contributing to the current pause and review.

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The new business model we introduced in July that opens up compute access to the fast-growing AI ecosystem is still in place and continues to evolve due to high demand.