Nvidia has launched a new financial model to boost its GPU sales amid rising competition. The company is now insuring loans for specialized neo-cloud providers that offer AI computing power.
Earlier this year, Fireworks AI sought to rent hundreds of millions of dollars in AI computing power from GMI Cloud. However, GMI Cloud first needed to acquire Nvidia's GPU systems, and banks were reluctant to provide funding as Fireworks AI lacked an investment rating.
To address this issue, Nvidia proposed a new scheme where the company assumes the risk of payment defaults in exchange for a share of GMI Cloud's revenues. Under this model, GMI Cloud is investing $500 million to expand its AI infrastructure.
The agreement facilitates the acquisition of loans for neo-cloud companies while simultaneously increasing Nvidia's GPU sales. This month, Fireworks AI raised $1.5 billion, reaching a valuation of $17.5 billion, but banks remain cautious about financing AI startups.
New model participants also include Firmus and Sharon AI. Analysts believe this strategy allows Nvidia to expand its customer base beyond major cloud providers, although some experts warn of potential risks if funding is not backed by actual demand.
Earlier, Nvidia introduced the DGX Cloud Lepton platform, which integrates GPU computing power from various cloud providers, making resources needed for training and deploying AI models more accessible.
