Nvidia Pauses Revenue-Sharing Deals With AI Cloud Companies -- WSJ

By Anissa Gardizy and Berber Jin

Nvidia paused some deals in a new financing initiative that offered credit support to AI cloud providers in exchange for a share of revenue, according to people familiar with the matter.

Some Nvidia employees expressed concern to current and potential customers that the program could draw antitrust scrutiny, and said there are sensitivities around the extent to which the chip giant can dictate how their customers do business, the people said.

Nvidia stepped back from the program last week, less than two months after announcing it, the people said. The precise reason for the decision couldn't be learned.

Nvidia could revamp the program in the future or fold it into another initiative, some of the people said.

The move comes as Nvidia faces growing scrutiny over its use of its balance sheet to support projects that, in turn, create demand for its chips. The world's largest company by market cap also recently scaled back a proposed financial backstop for OpenAI's massive data-center project in Ohio amid concerns about how investors would react to the potential liability.

"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 spokeswoman said.

The arrangement, announced in July, gave Nvidia two ways to profit: first by selling its chips; and then by collecting a portion of the revenue generated when customers rented them. The first two companies that were named as cloud providers participating in the financing initiative were Sharon AI and Firmus Technologies, according to Nvidia's announcement.

In the first few weeks of the program, Nvidia rankled some of its potential partners with the extent of control it sought, some of the people familiar with the matter said.

Nvidia told some providers that they could rent the chips only to approved customers. Nvidia also indicated that it preferred the capacity to be distributed among several smaller AI companies rather than leased to a single large customer, the people said. Some cloud providers resisted, arguing that they should be free to select their own customers.

The program, called the AI Compute Partnership, was designed to solve a financing problem facing smaller cloud providers. Building an AI cloud requires those providers to spend billions of dollars on Nvidia chips, known as graphics processing units, or GPUs, and data centers, often before they have enough firm customer contracts to secure financing.

Nvidia sought to fill that gap by promising to rent the GPU capacity itself if the provider couldn't find another customer. That commitment gave the provider a source of guaranteed revenue, making it easier to borrow the money needed to build the infrastructure.

Nvidia disclosed the scale of the program for the first time in its quarterly filing this week. The company said it had made $36 billion of commitments under agreements that typically lasted six years, but noted that as cloud providers sold capacity to other customers, that commitment would decrease.

Nvidia Chief Financial Officer Colette Kress mentioned the revenue-share program Wednesday in a call with investors, adding that the new revenue stream could generate billions of dollars for the company over the medium to long term.

Cloud providers typically rent their cloud capacity to customers for a few dollars an hour per GPU.

Under the proposed deals, Nvidia and each cloud provider would establish a base hourly rate for the GPUs intended to cover the provider's costs, including the depreciation of the Nvidia chips, data-center expenses, and staffing, according to people familiar with the deals. Nvidia would receive 50% of any revenue cloud providers earned above that threshold on the GPUs, those people said.

Write to Anissa Gardizy at anissa.gardizy@wsj.com and Berber Jin at berber.jin@wsj.com

(END) Dow Jones Newswires

August 27, 2026 17:46 ET (21:46 GMT)