Nvidia Pauses AI Cloud Revenue-Sharing Deals Amid Antitrust Concerns, WSJ Reports

Nvidia has paused some deals within a new financing initiative designed to help AI cloud companies purchase its chips in exchange for a share of their revenue, the Wall Street Journal reported Thursday, citing people familiar with the matter. The move comes less than two months after the program's launch and follows internal concerns that the arrangement could attract antitrust scrutiny.

Program Details and Pause

Announced in July, the initiative was a novel business model aimed at supporting AI cloud firms facing the high cost of Nvidia's advanced hardware. Under the reported terms, Nvidia would:

• Offer credit support to help companies purchase its chips.
• In return, receive a share of the cloud revenue generated from that Nvidia-powered capacity.
• Retain the option to rent back any compute capacity that customers were unable to sell.

According to the Journal's report, the chip giant stepped back from the program last week after some of its own employees expressed concerns to customers about the potential for regulatory challenges. The report suggests the initiative could be revamped or integrated into another program.

Partner Relations and Control

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The structure of the deals reportedly created friction with some potential partners. The Journal noted sensitivities around the degree of control Nvidia sought over its customers' operations.

In the program's initial weeks, Nvidia allegedly told some customers they could only rent the chip capacity to pre-approved clients. It also signaled a preference for distributing the compute power among several smaller AI firms rather than a single large customer, according to the report.

Nvidia's Position and Market Implications

In a statement, an Nvidia spokesperson said the business model introduced in July "is still in place and continues to evolve due to high demand." This suggests the company is adjusting the program rather than abandoning it entirely.

For investors, the development highlights the fine line Nvidia must walk as its dominance in the AI chip market grows. The pause, driven by fears of anti-competitive behavior accusations, underscores the increasing regulatory risk accompanying the company's powerful market position. Any business practice perceived as dictating terms to customers could draw unwanted attention from regulators in the U.S. and abroad.