Nvidia Pauses Revenue-Sharing Financing with AI Cloud Providers Amid Antitrust Concerns

Nvidia Corp. has temporarily paused its financing program that provides credit support to AI cloud service providers in exchange for revenue sharing, exiting less than two months after its launch, according to reports.

Employees Raise Antitrust Concerns

Some employees of the company have told existing and potential customers that they worry the program could invite antitrust scrutiny, citing sensitivity over how much control the chip giant may exert over its customers' businesses, the Wall Street Journal reported Thursday.

The report added, citing people familiar with the matter, that Nvidia exited the program last week and may adjust it in the future or fold it into another initiative.

Nvidia did not immediately respond to a request for comment.

Program Launched in July

The program, launched in July, provided credit support to AI cloud service providers through minimum revenue guarantees in exchange for future revenue sharing above a certain threshold, enabling the company to profit from both hardware sales and a cut of customer earnings.

"In this model, we get revenue twice—once from hardware sales and once from rental revenue sharing," Chief Financial Officer Colette Kress said on Wednesday's second-quarter earnings call.

She pushed back against claims that the arrangement amounted to "circular financing," saying the company's risk remains low because its computing hardware can always be redeployed to other customers.

Part of Broader Financing Initiatives

The revenue-sharing model is one of several tools Nvidia uses to support its customer ecosystem, including nearly $50 billion in investments in frontier AI labs and partnerships with Apollo Global Management, BlackRock Inc., Blackstone Inc., Brookfield Asset Management, Goldman Sachs, and KKR & Co. Inc. to mobilize over $500 billion in third-party infrastructure capital.

Earlier this month, "The Big Short" investor Michael Burry called Nvidia's AI financing initiatives a "Wall Street gimmick."

The pause comes as Nvidia reported record second-quarter revenue of $96.22 billion, beating analyst expectations of $92.11 billion, and guided third-quarter revenue of $108 billion—a figure that, if achieved, would mark roughly 1,730% revenue growth over four years.

Stock movement: The company's shares rose 8.74% in regular trading Thursday to close at $227.98, but fell 0.83% in premarket trading Friday to $226.09. Edge rankings show Nvidia's stock momentum score at the 79th percentile and growth score at the 98th percentile.