Nvidia pauses revenue-sharing deals with AI cloud companies, WSJ reports
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Aug 27 : Nvidia has paused some deals in a new financing initiative that offered credit support to AI cloud companies in exchange for a share of revenue, the Wall Street Journal reported on Thursday, citing people familiar with the matter.
Some Nvidia employees expressed concerns to current and potential customers that the initiative could draw antitrust scrutiny, the report said.
The chip giant stepped back from the program last week, the Journal said, adding that the company could still revamp the initiative or fold it into another program.
“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,” an Nvidia spokesperson said.
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The reported move comes less than two months after Nvidia announced the program. The company introduced it as a new business model designed to support financing needs at AI cloud firms so that they can purchase its expensive chips.
Nvidia had sought to rent the compute capacity back if its cloud customers were unable to sell it. It would also earn a share of their cloud revenues derived from Nvidia-powered capacity, on top of the money made on the chips sale itself.
The employees said there are sensitivities around the extent to which Nvidia can dictate how its customers do business, according to the Journal.
In the early weeks of the program, Nvidia irked some potential partners with the extent of control it sought, the report said.
The company told some customers that they could only rent the chips out to approved customers and signaled it preferred the capacity to be distributed among multiple smaller AI firms rather than one large customer, the Journal said.
Source: Reuters
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