Nvidia Now Holds $99B in Equity Stakes, Finances AI Customers
The chipmaker is using its balance sheet to fund fast-growing AI labs that can't afford the infrastructure they need.
Nvidia has quietly transformed from a chip vendor into something resembling a financial institution for the AI industry, holding roughly $99 billion in equity investments and extending financing terms that help customers buy infrastructure they couldn't otherwise afford.
The company disclosed that its public and private equity holdings reached $95.6 billion at the end of July, up from less than $100 million in early 2020, according to details first reported by Yahoo Finance. The portfolio includes stakes in Intel, CoreWeave, Coherent, Nokia, Synopsys, and Nebius, among others.
Financing the AI boom
The shift reflects a fundamental challenge in the AI infrastructure market: frontier AI labs need computing power faster than their balance sheets can support it. Nvidia CFO Colette Kress said these customers have "extraordinary demand" but are "growing faster than what their balance sheets and credit profiles can support."
Nvidia is addressing this gap through multiple mechanisms. The company now gives some large customers up to a year to pay for data center purchases. Accounts receivable jumped to $63.1 billion, while average collection time rose to 60 days from 45.
For AI cloud providers, Nvidia has created a more complex arrangement: it guarantees a minimum revenue level to help them secure financing, then takes a share of rental revenue above that floor. "We're not making loans in this model," Kress explained. "We get paid twice, once on the hardware sale and again through the share of rental revenue."
The company disclosed up to $108.5 billion in guarantees, with $105 billion tied to the SB Energy data center buildout for OpenAI.
Why it matters
Nvidia's financing strategy addresses a critical bottleneck in AI development: capital constraints. By using its $99 billion equity portfolio and strong balance sheet to fund customers, Nvidia ensures continued demand for its chips while capturing additional revenue streams. The approach also deepens customer relationships and creates switching costs — companies that rely on Nvidia's financing become more locked into its ecosystem. Morgan Stanley has dubbed this "balance-sheet-as-a-service," and Kress indicated AI labs using Nvidia's balance sheet could represent roughly 25% of the company's business next year.
Strong quarter amid strategic shift
Nvidia reported $96.2 billion in revenue for the quarter, with Data Center sales hitting $89 billion. The company guided to approximately $108 billion in revenue for the current quarter. Shares initially dropped about 3% after the Wednesday earnings report before recovering during the conference call.
CEO Jensen Huang expressed no concerns about the scale of investments. "I think the only regret that I have is that I didn't invest more and sooner," he said regarding Nvidia's investments in AI labs.
These details were first reported by Yahoo Finance.
This is an original analysis by the Omega editorial team. Source reporting: AI Watch.
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