NVIDIA shows a growing appetite for rental data center capacities. It seems that the chip designer builds his own “Ki cloud”.
• NVIDIA asks significantly more rental data center capacities
• Nvidia may build its own AI cloud
• Software business could be promoted
Hardly any other company benefits from the hype about artificial intelligence as the US group Nvidia, which was able to vibrate the undisputed market leader for AI high-performance processors. Thanks to its technological advantage – its technologies originally developed for graphics cards also prove themselves particularly well for AI applications – NVIDIA currently masters around 80 percent of the world market for AI high -performance processors. But that’s not all, as “Investor’s Business Daily” reports, the group apparently wants to open up further sources of money.
More rental data center capacities
Accordingly, Nvidia suddenly rented significantly more capacities than usual in state-of-the-art data centers that are specially designed for AI processing. Michael Elias, analyst at TD Cowen, referred to an extensive rental agreement for data center capacities in North Virginia, which was probably concluded between Nvidia and Digital Realty. According to the analyst, Nvidia also wants to secure additional data center capacities using further deals.
“We see the potential that NVIDIA 2025 accelerates its rental of data centers to secure more capacity for his ‘Ki-Cloud’-with the possibility that Nvidia will survive his hyperscal competitor in terms of data center renting” is cited from a report by Elias. He also wrote: “We were surprised to find out of the scope of Nvidia’s data center requirement, since the rental of blocks with over 100 megawatts represents a significant deviation from Nvidia’s previous approach, in which capacity of only 10 to 15 megawatts was rented,” said the analyst. “Our further research showed that these larger capacity blocks are intended to support a ‘Ki cloud’.”
With the NVIDIA DGX Cloud, the group already has its own AI cloud platform that provides companies with AI calculation as a service. Customers can use DGX servers with powerful GPUs directly via the cloud without buying their own hardware. However, Nvidia not only hosts its DGX Cloud in its own data centers, but also uses partners. The report that NVIDIA is now renting large quantities of data center capacities indicates that your own independent Ki cloud infrastructure may be set up with the aim of reducing the dependency on third-party providers such as Amazon.
Higher margins for Nvidia’s software business
With the additional data center capacities, NVIDIA could not only rent servers that are powered by its own chips, but also host its AI software development platform.
The end-to-end software suite NVIDIA AI Enterprise supports companies-for example from the automotive industry, the healthcare system and the financial sector-to develop tailor-made AI applications. It also offers optimized and tested AI frameworks, libraries and tools for various applications. So far, customers have been able to rent these AWS platform these AWS tools, but Nvidia’s profit margins with their own data centers would be higher.
Higher margins could persuade investors to get in despite the currently high level of the Nvidia share.
Editor finance.net
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