Skip NavigationMarketsBusinessInvestingTechPoliticsVideoWatchlistInvesting Club
PRO
LivestreamMenu
- CNBC’s Jim Cramer said Nvidia’s growing sovereign AI business could help reduce the company’s dependence on hyperscalers.
- He said governments around the world are investing heavily in domestic AI infrastructure, creating a new source of demand for Nvidia’s chips that is less dependent on near-term financial returns.
watch nowVIDEO02:15Nvidia wants to try to get everyone to be a customer, says Jim CramerMad Money with Jim Cramer
CNBC’s Jim Cramer said Monday that Nvidia’s growing business with sovereign nations could help ease investor concerns about the company’s dependence on a handful of hyperscale customers.
“Nvidia does not want to be hostage to customers that are trying their best to get off Nvidia,” the “Mad Money” host said. “It wants to try to get everyone to be a customer.”
Investors have started to worry that major cloud providers such as Amazon and Alphabet could eventually reduce their reliance on Nvidia by developing their own AI chips. But Cramer said Nvidia is increasingly finding a new source of demand through sovereign AI initiatives, as governments around the world race to build domestic artificial intelligence infrastructure.
CEO Jensen Huang has spent much of the past year promoting those efforts globally. According to Cramer, countries including Singapore, India, Japan, Switzerland, Germany, Taiwan, Israel, Qatar, the United Arab Emirates and Saudi Arabia are investing in sovereign AI projects powered by Nvidia technology.
Unlike hyperscalers, these customers are not necessarily focused on generating an immediate financial return, Cramer said.
“We keep hearing that the hyperscalers buying Nvidia’s chips are losing money on the purchase,” he said. “But all of these countries are buying Nvidia’s wares too, and they’re not looking for a quick return.”
That distinction is important because it broadens Nvidia’s customer base at a time when some of its largest buyers are working to develop competing chips. Sovereign AI already accounts for roughly 14% of Nvidia’s business, according to Cramer, and he believes the opportunity could become even more meaningful as projects currently in development come online.
“Countries are buying these chips in droves for their sovereign AI programs and that alone will lessen Nvidia’s dependence on a handful of major hyperscalers,” Cramer said.
VIDEO04:05Jim Cramer talks the state of play in the AI arms race
Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.
Questions for Cramer?
Call Cramer: 1-800-743-CNBC
Want to take a deep dive into Cramer’s world? Hit him up!
Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram
Questions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com
About The Author
