Nvidia is pulling back from revenue-sharing deals that gave smaller AI cloud providers GPU access in exchange for a cut of their cloud revenue. The move could force neocloud firms like Sharon AI and Firmus Technologies to find capital elsewhere, and investors are watching whether it shrinks the roughly 50% of data center revenue coming from Nvidia's non-hyperscale segment.
Nvidia is stepping back from revenue-sharing arrangements with AI cloud providers, a shift that could reshape how smaller players in AI infrastructure access the company's most sought-after chips. The arrangements let AI cloud providers procure Nvidia GPUs with financial backing from Nvidia itself.
How the revenue-sharing model worked
Nvidia formally introduced the model on July 1, 2026, acting as both venture capitalist and hardware supplier at once. In exchange for the financial support, Nvidia collected traditional hardware sales revenue plus a percentage of the cloud revenue those GPUs generated.
Early participants included Australia's Sharon AI, expected to deploy up to 40,000 Grace Blackwell GB300 GPUs over six years. Indonesia's Firmus Technologies in Batam could scale deployment to 170,000 GPUs with anticipated revenue of $25 billion to $30 billion over six years.
A backstop business already worth billions
The revenue-sharing model built on earlier arrangements Nvidia struck with CoreWeave and Lambda, valued at $6.3 billion and $1.5 billion respectively. Analysts have described the approach as "vendor financing," a term more often applied to telecom equipment makers than semiconductor companies.
As of Q2 fiscal 2027, Nvidia's non-hyperscale segment, internally called "ACIE," accounted for roughly 50% of the company's data center revenue.
What the halt means for AI cloud providers
For neocloud providers already participating in or hoping to join these programs, the halt is a significant setback. Without that support, these companies will need to secure capital elsewhere.
Investors should watch how quickly the ACIE segment's share of data center revenue changes in coming quarters. A significant drop from the 50% mark would suggest the revenue-sharing model was less about genuine demand from smaller providers and more about Nvidia's financial incentives making otherwise marginal business cases viable.
Source: Crypto Briefing
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