Nvidia has put parts of its new cloud financing program for smaller cloud providers on hold. The company rolled it out in July to help those firms pay for its in-demand chips, but The Wall Street Journal reports that employee antitrust concerns and partner pushback have now slowed parts of the plan.
The Journal says Nvidia set up the program to help smaller cloud providers finance its sought-after hardware by offering credit support for Nvidia chips in exchange for a share of the revenue generated from rented computing capacity. Some of the proposed six-year deals reportedly would’ve let Nvidia take as much as 50% of partner revenue once certain thresholds were crossed. That raised concerns that Nvidia could end up with too much influence over customers, chip allocation, and even the day-to-day operations of its partners.
The Wall Street Journal also reports that the program had already secured about $36 billion in commitments. Even so, the model started to blur the line between supplier, financier, and business partner.
Critics see circular financing. Supporters see a practical way to ease the bottlenecks that have slowed cloud buildouts. News of the pause briefly weighed on Nvidia shares, along with some neocloud stocks.
If you follow Nvidia’s broader partner strategy, this deserves a close look. The company seems to be moving more carefully as scrutiny from regulators and partners keeps building.
You can read the full report at The Wall Street Journal.
Author: Monique Irish Casingal
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