Nvidia has introduced a new revenue-sharing business model that allows the company to collect ongoing royalties from AI cloud providers in addition to initial hardware sales revenue.

Key Points

• Nvidia will collect a percentage of revenue from cloud partners alongside standard upfront payments for its AI hardware.
• The model aims to help cash-poor startups finance expensive infrastructure by providing credit support in exchange for future earnings.
• Australian firm Sharon AI and Singapore-based Firmus Technologies are the first partners to adopt this revenue-sharing structure.
• Sharon AI’s agreement includes 72 MW of data center capacity, while Firmus is developing a 360 MW campus in Indonesia.
• The initiative shifts Nvidia’s strategy from direct capital investment in customers to a recurring, usage-linked royalty stream.

Why it Matters

This model creates a new, long-term revenue stream for Nvidia that ties its financial performance directly to the utilization rates of its partners' data centers. By lowering the barrier to entry for smaller cloud providers, Nvidia secures deeper market penetration while effectively becoming a stakeholder in its customers' ongoing business success.