A quarter of Nvidia’s business next year comes from labs it is financing
$50 billion. That's what Nvidia has put into the AI labs that are now its biggest customers—and it's about to get bigger.
Why it matters
Nvidia is financing the very labs buying its chips, creating a circular revenue dependency where ~25% of next year's business comes from companies Nvidia itself is bankrolling. This raises questions about the sustainability of the AI capex model and concentration risk for the chip giant.
The key facts
5 to knowNvidia has invested nearly $50 billion into AI labs it backs
Commitments lined up for more than $500 billion in future financing
CFO Colette Kress stated demand from backed labs will contribute ~25% of Nvidia's business next year
Announcement made August 26 earnings call
This represents circular financing: Nvidia funds labs → labs buy Nvidia chips → labs generate Nvidia revenue
Go to the source
AI Newsartificialintelligence-news.com
Publisher excerpt: Nvidia has put nearly US$50 billion into the AI labs that buy its chips, and has lined up commitments for more than $500 billion Colette Kress, the company’s chief financial officer, told analysts on August 26 that demand from the labs Nvidia backs with its own balance sheet will contribute toward…