Nvidia offers AI startups compute power now in exchange for a cut of future revenue

Nvidia offers to take a cut of AI cloud revenue on top of hardware sales in new optional financing vehicle -- trades tokens for revenue cut

Sharon AI and Firmus are the first partners, with a combined total of up to 210,000 GPUs. Nvidia has announced a new business model under which it'll be able to double-dip for revenue on the same silicon: once when its partner AI clouds use its hardware, and again as an ongoing percentage of the revenue that hardware generates. In a blog post co-authored by CFO Colette Kress, the company pitched the "revenue-sharing and credit-support model" as a way to open compute access to startups that can't finance it themselves. In practice, cash-poor AI companies trade a slice of whatever they eventually earn for tokens today, while a supplier already running roughly 75% gross margins reaches into its customers' income statements for a second helping of cash. Australia's Sharon AI and Singapore-based Firmus Technologies are the first named partners. Under the structure, participating AI clouds procure Nvidia infrastructure and sell Nvidia-powered cloud services to end customers. Nvidia collects its usual product revenue on the hardware plus a percentage of the cloud income earned on that capacity, which the blog post describes as a recurring, usage-linked earnings stream. Per Bloomberg, developers receive token credits in exchange for a slice of their future sales, but neither Nvidia nor its partners has disclosed the revenue-split percentages. It's no secret that the credit-support side of this model will help to address a financing gap that Nvidia itself has identified. Even signed, long-term customer commitments have failed to convince lenders to fund large-scale deployments, leaving smaller clouds unable to borrow against the demand they had already generated. In an 8-K filing dated June 12th, Sharon AI disclosed that the agreement runs for six years and covers 72 MW of new Australian data center capacity built to Nvidia's DSX AI factory design, scaling to as many as 40,000 Grace Blackwell GB300 GPUs. The Nasdaq-listed neocloud separately holds a revenue-share facility of up to $200 million with investor Digital Alpha, disclosed in its CY25 results, meaning portions of its income are now pledged in two directions. Meanwhile, Firmus is building a DSX-aligned campus in Batam, Indonesia, that's expected to scale to 360 MW and house up to 170,000 Nvidia GPUs. Nvidia has spent much of the last year funnelling cash directly to its customers, including a $30 billion participation in OpenAI's $110 billion funding round and backing for xAI's $20 billion Colossus 2 financing, arrangements that drew repeated circular financing criticism. The new model inverts that: rather than investing capital that returns as GPU orders, Nvidia extends credit support and collects a royalty on its partners' sales for years afterward. That royalty also ties a slice of Nvidia's income to utilization instead of hardware sales. If partner clouds can't keep racks rented, the usage-linked stream shrinks, a live concern given the depreciation pressure already building on operators paying off hardware that Nvidia refreshes pretty much every year. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

Nvidia floats double-dipping datacenter financing scheme

AI infrastructure doesn't come cheap. To keep up, rent-a-GPU outfits such as CoreWeave and Lambda have had to borrow billions of dollars from venture capitalists and hedge funds to bankroll their datacenter build outs. So long as their revenues are greater than the interest payments on the loans, they have the potential to make a profit. Unfortunately for entrepreneurs looking to cash in on the AI hype, not everyone with a bright idea can tap into this kind of funding. But don't worry, Nvidia is here to help. In a blog post published this week, the GPU giant floated the idea for a new program that promises to make it easier for emerging AI cloud providers to get the financing they need, although it's not clear that Nvidia itself will be providing the financing - it may only be brokering deals with third-party lenders. Regardless, the GPU provider is expecting a cut of the revenues in exchange. "Through the partnership, AI clouds will sell Nvidia-powered cloud services, with Nvidia earning both standard product revenue and a share of the cloud revenue on the supported capacity," the company explained. "This structure accelerates adoption of Nvidia platforms among the high-growth, high-conviction AI native sector, and provides Nvidia with a recurring, usage-linked earnings stream." In other words, Nvidia first brings in revenues based on how many of its products are deployed, and later, if the neocloud turns out to be successful, a share of the revenues its hardware generates. It could also provide a bit of insulation against a potential AI bust - if demand for new GPUs falls, Nvidia may still be able to earn a recurring revenue from the GPUs it's already sold, assuming customer demand remains high. Specifics on how this new business model will work in practice are rather thin. Nvidia declined to offer details beyond the contents of its blog post. However, the company has already signed up two customers, Sharon AI and Firmus, to put it to the test. Sharon AI is a sovereign AI cloud provider founded in 2024 based out of Australia, which is looking to deploy as many as 40,000 Grace Blackwell GB300 GPUs in the land down under. Meanwhile, Firmus plans to deploy as many as 170,000 Nvidia GPUs at a 360-megawatt facility in Batam, Indonesia, designed specifically to Nvidia's DSX spec. ®

Nvidia offers start-up customers chance to swap compute power for revenue share

Chipmaker Nvidia says it is entering revenue-sharing agreements with fast-growing start-ups, in a move which will see customers swap access to compute power for a slice of future profits. The artificial intelligence chip leader says its new partnership program, announced Thursday, offers fast-growing AI startups token credits to power their development. Cloud-based AI firms, model builders and other enterprises will share both product and cloud revenue with Nvidia, which is positioning itself as an intermediary helping startups gain direct access to full-stack computing powered by Nvidia chips. In its announcement, Nvidia named two initial partners who will provide the compute power behind the scheme. Australia-based Sharon AI will deploy up to 40,000 Nvidia GPUs, while Singapore AI infrastructure company Firmus Technologies says it is building a data center in Batam, Indonesia, which is expected to scale to 360 megawatts and house up to 170,000 Nvidia GPUs. Nvidia's move illustrates the critical importance of access to scarce compute power for AI-oriented startups, with GPUs likened to oil and even reportedly tied to futures contracts as users grapple with fluctuations in cost and issues around availability. Meanwhile, AI firms have increasingly entered into revenue and equity-sharing sharing agreements with chipmakers in order to circumvent liquidity issues afflicting the sector. OpenAI has inked a number of deals that have seen it buy shares or entertain investments from partners including Amazon and AMD, CNBC reported in January. Nvidia earlier this month said it was aiming to raise debt which sources said could amount to at least $20 billion. The firm intends to use the proceeds from the offering for general corporate purposes, including repayment and refinancing of existing debt.

Nvidia offers AI startups compute now, payment later

Instead of just selling chips, Nvidia is offering AI clouds a revenue-sharing and credit-support model built to get GPUs into the hands of companies that could not otherwise afford them. Nvidia is changing how it gets paid. The company announced on Wednesday a new arrangement in which AI cloud providers can access large volumes of its chips in exchange for a share of the revenue those chips eventually generate, rather than paying the full cost upfront. The logic, as Nvidia frames it, is a capital problem. Emerging AI companies have historically had limited access to the capital-intensive infrastructure needed to train and run large models, and even long-term customer commitments have often not been enough to unlock financing for compute. Nvidia's answer is to let AI clouds buy its hardware and resell Nvidia-powered cloud capacity, with Nvidia collecting standard product revenue on the chips and then a further cut of whatever the cloud earns from renting them out. It is the same compute crunch that has sent valuations soaring for GPU resellers like Runpod, which hit a $1 billion valuation this June renting out chips it does not own. Two companies are already running on the model. Sharon AI, an Australian AI cloud operator, is deploying up to 40,000 Nvidia Grace Blackwell GB300 GPUs across a six-year, 72-megawatt agreement, a deal its cofounder and chief executive James Manning called "a pivotal moment" for the company's push into sovereign, large-scale AI compute. Firmus, the other early partner, is building a much larger campus. The Australian firm is developing a 360-megawatt Nvidia DSX AI factory in Batam, Indonesia, that will eventually house up to 170,000 GPUs across Nvidia's Grace-Blackwell, Vera-Rubin and Vera platforms. Bloomberg has reported that Firmus expects between $25 billion and $30 billion in committed offtake agreements over the deal's first six years, a scale that only makes sense if compute demand from AI-native customers keeps climbing. Nvidia named Baseten, Fireworks AI and Together AI as examples of the customers this is meant to serve. These are companies that need immediate, elastic access to AI cloud capacity for training, fine-tuning and high-volume inference without committing to years of hardware procurement themselves, a different customer to the hyperscalers Nvidia has courted for a decade. It is a bet on the long tail of model builders, agent platforms and enterprises that want frontier compute but not the balance-sheet risk of building a data centre. The arrangement also gives Nvidia something it has not had at this scale before, a recurring, usage-linked income stream layered on top of hardware sales. The model pairs revenue sharing with credit support, effectively helping smaller AI clouds finance the purchase in the first place. It is not a loan, but it functions like vendor financing with an equity-like upside attached. None of this changes what Nvidia sells, and the chips still cost what they cost. What changes is who can afford to buy them and on what terms, which matters more than it sounds. Site selection, power procurement, construction and hardware bring-up can take years before a startup ever runs a workload, and Nvidia's pitch is that AI cloud partners can compress that timeline by selling capacity that already exists. The company has already committed more than $40 billion to direct AI equity investments this year, spanning OpenAI, Nebius and dozens of smaller rounds. A revenue-sharing compute model does something similar without touching the cap table, keeping the balance sheet exposure with its cloud partners instead of on its own books. Nvidia has not disclosed how many AI clouds it expects to sign on this basis, or whether the Sharon AI and Firmus terms will be standardised across future partners. It also deepens a dependency that has already drawn scrutiny, as an increasing share of the AI industry's growth becomes contractually tied to Nvidia's own success. If the model works, more compute reaches more startups faster than the traditional buy-it-outright approach allowed. If AI-native demand cools, Nvidia is now exposed to that slowdown twice, once through chip sales and again through the cloud revenue it has agreed to share.

Nvidia Is Making it Easier for AI Startups to Get Compute Power With a New Cloud and Revenue-Sharing Prog

The Jensen Huang-led company announced on Wednesday that the AI cloud providers would offer services powered by Nvidia technology under this program. This setup enables Nvidia to profit from hardware sales and a share of the cloud providers' future earnings. The initiative aims to alleviate the financial challenges encountered by emerging AI firms requiring access to expensive computing infrastructure. Several cloud providers, including Sharon AI and Firmus, are among the first to build AI infrastructure using Nvidia's DSX data center platform under the program's initial rollout. Sharon AI plans to deploy up to 40,000 NVIDIA Grace Blackwell GB300 GPUs, while Firmus is developing a DSX AI factory campus in Batam, Indonesia. Nvidia is expanding its AI ecosystem by investing in cloud and data center partnerships, helping emerging AI companies adopt its processors and broaden the use of its technology amid growing demand for AI computing. Nvidia's AI Push Divides Experts Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Nvidia offers revenue sharing agreements for AI startups By Investing.com

Investing.com-- Nvidia said on Wednesday it was offering artificial intelligence startups computing resources through a revenue-sharing and credit-support model. The company said in a press release that through the partnership, AI cloud providers will sell Nvidia-powered cloud services, granting the company both standard product revenue and a share of the cloud earnings. Get more breaking news on Nvidia and other top AI stocks by subscribing to InvestingPro Nvidia said the new arrangements were aimed at providing emerging AI companies with access to the capital-intensive infrastructure they would otherwise need vast amounts of funds to access. The AI major said cloud companies were already building AI centers on its DSX data center platform, with Sharon AI and Firmus being among the first companies to work with Nvidia through the new business model. The business model comes as Nvidia engages in a flurry of major AI and data center deals to further development in the fast-growing technology, while also gaining more customers for its advanced AI processors. AI and data center demand brought Nvidia a major windfall over the past three years, helping balloon its valuation to the become biggest company on Wall Street.