Nvidia’s New Way to Profit From the AI Boom: Will Startups Pay Up?

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Nvidia (NVDA) will let AI startups use its chips now and pay with a share of future revenue.

The company detailed the revenue-sharing program in a July 1 blog post. The move casts Nvidia as a financier of the AI buildout rather than a pure hardware seller.

From Chip Sales to Compute Royalties

Nvidia normally earns a single payment when it sells a graphics processing unit (GPU). This program adds a second, recurring stream on top.

Cloud partners buy Nvidia systems, then sell access to startups that lack the capital for their own data centers. In return, Nvidia takes a cut of the cloud revenue those chips generate.

“This structure … provides NVIDIA with a recurring, usage-linked earnings stream,” read an excerpt in the blog, co-authored  with Chief Financial Officer Colette Kress.

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The plan builds on Nvidia’s new AI compute model. It also widens the base beyond big buyers now trimming their orders.

A Deeper Moat, and Rising Competition

Startups that take the credits stay tied to Nvidia’s chips and software for years. Sharon AI will install up to 40,000 Grace Blackwell GB300 chips under the program.

Firmus is building a 360-megawatt campus in Batam, Indonesia, for up to 170,000 more GPUs. Sharon AI frames its buildout as sovereign compute for markets outside the United States.

The lock-in matters as rivals gain. China recently trained a large model without Nvidia chips, and buyers keep testing cheaper options.

A Bigger Bet on the AI Boom

The design echoes what critics call circular financing. Nvidia has pledged up to $100 billion to OpenAI. It also owns about 7% of CoreWeave, a customer that buys its chips.

Analysts liken the loop to vendor financing from the dot-com era. Michael Burry and other skeptics see the setup feeding AI bubble fears.

The sums are vast. Morgan Stanley expects Big Tech’s AI capital spending to top $800 billion in 2026. That figure could reach $1.1 trillion in 2027, rivaling the US defense budget.

Meanwhile, markets stayed calm. NVDA closed at $194.69 on July 2, the last session before the holiday break. Its value sits near $4.8 trillion, still below its 52-week high.

Nvidia (NVDA) Stock Performance. Source: TradingView Nvidia (NVDA) Stock Performance. Source: TradingView

The coming quarters will show how much revenue the program adds. They will also reveal whether startups treat Nvidia as a partner or a landlord.

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