Nvidia Diversifies Beyond Big Tech with Sovereign AI Deals

Nvidia, the $3.2tn chipmaker, is pursuing a multibillion-dollar strategy to sell its artificial intelligence chips to nation states, corporate groups, and challengers to Big Tech companies such as Microsoft, Amazon, and Google. This includes partnerships with Saudi Arabia's Humain and the United Arab Emirates, which plans to build one of the world's largest data centres in coordination with the US government. By building its business beyond the hyperscalers, Nvidia is aiming to reduce its reliance on a limited number of customers, including the Big Tech companies that operate the largest cloud and consumer internet services.

Key Takeaways:

• Nvidia has announced a multibillion-dollar US chip deal with Saudi Arabia's Humain.
• The United Arab Emirates plans to build one of the world's largest data centres in coordination with the US government.
• Nvidia is working to bolster potential rivals to Amazon Web Services, Microsoft's Azure, and Google Cloud.
• The company is making "neoclouds", such as CoreWeave, Nebius, Crusoe, and Lambda, part of its growing network of "Nvidia Cloud Partners".
• Nvidia provides its cloud partners with preferential access to its internal resources, streamlined purchasing process, and invested in some of these neoclouds.
• Analysts estimate that deals with Saudi Arabia's new AI company, Humain, and Emirati AI company G42's plans will add billions of dollars to Nvidia's annual revenues.
• Nvidia executives say they have been approached by several other governments to buy its chips for sovereign AI projects.
• The company is aiming to diversify its business, with enterprise data centre sales doubling year on year in its most recent fiscal quarter.
• Nvidia has warned investors that it is still reliant on a limited number of customers, including Big Tech companies that operate the largest cloud and consumer internet services.
• Nvidia has partnered with several suppliers, including Cisco, Dell, and HP, to help sell to enterprise customers.
• The company's CEO, Jensen Huang, has become more explicit about Nvidia's efforts to diversify and has stated that "every industry" will have its own "AI factories".
• A neocloud executive who works closely with Nvidia has stated that Big Tech companies are the "only ones who can monetise AI sustainably".
• Nvidia's Blackwell platform has been adopted by CoreWeave, one of the neoclouds, to host its AI data centres.

Statistics:

• Nvidia's market value: $3.2tn
• Enterprise data centre sales: doubled year on year in Nvidia's most recent fiscal quarter
• Regionally cloud providers took up a greater portion of Nvidia's sales: no specific figure
• Nvidia's annual revenues: estimated to increase by billions of dollars due to sovereign AI deals
• Nvidia's investment in neoclouds: no specific figure
• Number of countries approached by Nvidia for sovereign AI projects: no specific figure

Sources:

• Nvidia's CEO Jensen Huang interview with the Financial Times in March
• Nvidia's announcement of the multibillion-dollar US chip deal with Saudi Arabia's Humain
• The United Arab Emirates' plans to build one of the world's largest data centres in coordination with the US government
• Nvidia's partnership with suppliers, including Cisco, Dell, and HP
• Nvidia's Blackwell platform adoption by CoreWeave
• Quotes from Nvidia executives, analysts, and neocloud executives, including Vice-President of Compute and Networking at AWS, Dave Brown, and Chief Executive of Together AI, Vipul Ved Prakash.