Nvidia Halts Revenue-Sharing Program for AI Cloud Startups

Nvidia retreats from controversial financing model

Nvidia has suspended a financing program that offered credit support to AI cloud companies in exchange for a share of their revenue, according to a report by The Wall Street Journal. The chip manufacturer stepped back from the initiative last week, though it may revamp the program later or integrate it into another offering.

The program, announced less than two months ago, was designed to help small AI cloud firms access capital for purchasing Nvidia's AI chips. Under the model, Nvidia would rent compute capacity back from cloud customers unable to sell it themselves, providing a guaranteed buyer and easing borrowing requirements.

Nvidia would have earned revenue both from hardware sales and from a share of customers' cloud revenues generated by Nvidia-powered infrastructure. During its earnings call this week, the company said the model had potential to drive billions in revenue over the medium to long term.

Why it matters

The pause signals growing scrutiny of Nvidia's expanding financial entanglements with its own customers. Investors have raised concerns about "circular deals" that could artificially inflate demand for Nvidia's chips, while the company's deepening role in financing the AI ecosystem raises questions about market concentration. With Nvidia recently arranging $500 billion in customer financing and guaranteeing $105 billion for OpenAI's data center lease, the company's dual role as supplier and financier is drawing regulatory attention.

Internal concerns over antitrust risk

According to the Journal's report, some Nvidia employees expressed concerns to customers that the initiative could attract antitrust scrutiny. There were sensitivities around how much control Nvidia could exert over customers' business operations.

In early weeks of the program, Nvidia frustrated potential partners with the level of control it sought. The company told some cloud providers they could only rent chips to approved customers and indicated preference for distributing capacity among multiple smaller firms rather than one large customer. Under proposed deals, Nvidia would receive 50 percent of any revenue cloud providers earned through its chips beyond a certain threshold.

An Nvidia spokesperson said the "new business model that opens up compute access to the fast-growing AI ecosystem is still in place and continues to evolve due to high demand," though the company did not dispute the program's pause.

Broader financing push continues

The revenue-sharing program was part of Nvidia's broader effort to support AI infrastructure development. This month, the company helped arrange $500 billion in financing from major U.S. financial institutions for its customers. It also agreed to guarantee up to $105 billion to help OpenAI lease a massive data center.

These arrangements have intensified investor scrutiny of Nvidia's role in the AI supply chain, with questions about whether the company's financial support creates artificial demand for its products or represents genuine market expansion.

The details were first reported by The Wall Street Journal, citing people familiar with the matter.