NVIDIA's Financial Support to AI Labs Sparks Investor Concerns
NVIDIA is investing heavily in its own ecosystem by funding frontier AI labs, with nearly $50 billion already committed. Management expects a quarter of fiscal 2028 business to come from these supported customers. This strategy includes revenue-sharing deals and guarantees for cloud partners, aiming to expand NVIDIA's addressable market and create recurring usage-based income. The company’s equity portfolio has surged from around $7 billion in summer 2025 to nearly $99 billion today—a 14-fold increase—indicating a significant shift. Days of sales outstanding have risen to 60 days, reflecting extended payment terms for large customers with strong credit ratings. NVIDIA's stock trades at a high multiple compared to the S&P 500 and near its lowest valuation in ten years. Investors are watching whether this growth is sustainable or if it depends on NVIDIA funding its own demand.
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Topics: AI labs investment equity portfolio growth NVIDIA revenue-sharing deals