A quarter of Nvidia’s business next year comes from labs it is financing

artificialintelligence-news.com Aug 27, 2026

A quarter of Nvidia’s business next year comes from labs it is financing

Curated by Shubham · TechCapsules · Aug 27, 2026

AI-summarised brief · reviewed before publication

Nvidia disclosed that it has invested nearly $50 billion in AI labs that purchase its GPUs and has arranged financing platforms with six major investment firms to mobilise more than $500 billion of external capital for building data centres. CFO Colette Kress said these “circular financing” arrangements will generate roughly a quarter of Nvidia’s revenue in the next fiscal year. The model involves Nvidia funding labs, which use the capital to construct facilities that are then stocked with Nvidia chips, creating revenue that fuels further investment. Partnerships include Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR, though the $500 billion figure reflects intent rather than signed contracts. Nvidia also backs smaller cloud operators, earning fees on both equipment sales and rental income, while limiting exposure by reselling hardware if a customer defaults.

💡 Why It Matters

· By tying its own capital to the growth of AI compute infrastructure, Nvidia is turning its customers into co‑investors, locking in demand and creating a self‑reinforcing revenue loop that could reshape financing norms in the semiconductor sector.

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Nvidia results highlight 30% gap in order fulfilment

Nvidia reported $96.2 billion in revenue for its second fiscal quarter of 2027, marking an 18% sequential and 106% annual increase. Datacentre revenue reached $89 billion, driven by accelerating artificial intelligence hardware demand. CEO Jensen Huang stated that AI has reached an inflection point, with compute becoming directly profitable. However, the company faces significant supply chain constraints, admitting it can only fulfill 70% of customer orders. Huang emphasized that the entire supply chain is operating at maximum capacity, with new production coming online gradually rather than instantly. To address the backlog, Nvidia increased strategic supply commitments from $119 billion to $279 billion, primarily for memory procurement. This quarterly revenue figure notably exceeded Taiwan Semiconductor Manufacturing Company’s total annual revenue of $88.3 billion for 2024, highlighting the unprecedented scale of Nvidia’s current market dominance and the intense pressure on global semiconductor manufacturing infrastructure.

💡 The 30% fulfillment gap reveals that even industry leaders cannot instantly scale hardware to match explosive AI investment, creating a bottleneck that delays infrastructure deployment across the tech sector.

bernama.com · Aug 27

World : Nvidia More Than Doubles Revenue And Profit

Nvidia reported that its second fiscal quarter revenue more than doubled year‑on‑year to US$96.2 billion, while net profit surged 126 percent to US$59.7 billion. The company forecasts third‑quarter revenue of roughly US$108 billion, slightly above analyst expectations, and a gross margin of 74 percent. Shares dipped about one percent after the announcement. Nvidia’s growth is driven by high demand for AI computing power, with its chips now central to training and running large language models. The company’s market value stands at US$5.07 trillion, making it the world’s most valuable firm.

💡 Nvidia’s earnings confirm AI’s role as a catalyst for unprecedented corporate valuation, reshaping the tech investment landscape.

business-standard.com · Aug 27

Nvidia agrees to buy open source platform Hugging Face for $12.9 bn:…

Nvidia has agreed to acquire Hugging Face, an open‑source AI model repository, for $12.9 billion, according to a report by The Information. The purchase would give Nvidia control over Hugging Face’s extensive library of large‑language models and datasets, positioning the company to further dominate the AI hardware market. The deal is one of Nvidia’s largest acquisitions to date and follows its forecast of a 70% revenue increase next fiscal year. Hugging Face had previously rejected a $500 million offer from Nvidia last year.

💡 The acquisition signals Nvidia’s commitment to securing the software side of AI, potentially reshaping the competitive landscape for GPU and chip developers.

techcrunch.com · Aug 27

Nvidia closes in on Hugging Face acquisition

Nvidia has agreed to acquire Hugging Face for $12.9 billion, according to reports from The Information. The deal values the open-source AI hub at over $13 billion, though a signed agreement remains unconfirmed and talks could collapse. Neither company has commented, with Nvidia notably silent despite its usual rapid response to inaccurate reports. Founded in 2016, Hugging Face is a primary platform for sharing open-source AI models. This acquisition would secure Nvidia’s influence in the open-source sector, countering the rise of closed systems from competitors like Anthropic and OpenAI. The move also protects Nvidia’s chip dominance as major labs develop proprietary hardware. Additionally, it offers Nvidia a strategic re-entry into cloud computing via Hugging Face’s infrastructure. The price represents a significant increase from the company’s $4.5 billion valuation in 2023. Hugging Face previously rejected a $500 million investment from Nvidia last year, citing concerns over dominant investor influence.

💡 The acquisition neutralizes a key platform for open-source alternatives, effectively locking developers into Nvidia’s hardware ecosystem while competitors pivot to proprietary chips. By absorbing Hugging Face, Nvidia transforms a potential rival into a strategic asset that directly supports its cloud infrastructure and chip sales.

businesstimes.com.sg · Aug 27

Nvidia forecasts quarterly revenue above estimates, shares rise

Nvidia reported that its quarterly revenue more than doubled, exceeding Wall Street estimates and signaling sustained demand for its artificial intelligence chips. The chipmaker forecast third-quarter revenue of approximately US$108 billion, with an expected adjusted gross margin of 74 per cent. Additionally, Nvidia projected fiscal 2028 revenue growth of about 70 per cent. The company announced an expanded partnership with Amazon Web Services, committing to deploy an additional 2 million GPUs across Amazon’s global infrastructure in 2027 and 2028. Following the announcement, Nvidia shares rose more than 4 per cent in after-hours trading. The results underscore Nvidia’s position as a bellwether for the AI market, given its chips power most major data centers. This performance comes as Big Tech companies plan to spend over US$730 billion on AI infrastructure this year, although some clients are increasingly developing in-house chips to reduce reliance on Nvidia’s processors.

💡 Nvidia’s financial strength validates the massive capital expenditure cycle driving the current AI infrastructure boom. However, the simultaneous rise of in-house chip development by major clients suggests a potential long-term threat to Nvidia’s market dominance despite its short-term success.

businessworld.in · Aug 27

AWS To Deploy Two Million More Nvidia GPUs Globally In 2027-28

Amazon Web Services and Nvidia announced plans to deploy two million additional Nvidia GPUs across AWS’s global cloud infrastructure during 2027 and 2028. This expansion, featuring Blackwell Ultra, Rubin, and Rubin Ultra chips, responds to AI computing demand that has outpaced earlier forecasts. AWS CEO Matt Garman stated customers are shifting from experimentation to large-scale production workloads. The partnership also includes building AI factories for the US government, with infrastructure equipped with 100,000 GPUs for federal and national-security tasks. This move extends a 16-year collaboration, adding Nvidia’s Vera CPUs and NVLink Fusion technology. The capacity will support agentic AI, scientific research, and enterprise automation. AWS previously planned to add one million GPUs starting in 2026, but increased demand necessitated this larger scale. The integration aims to enhance security, reliability, and performance through AWS’s Nitro System and Elastic Fabric Adapter.

💡 The dedicated 100,000-GPU infrastructure for federal workloads marks a critical pivot in securing national AI capabilities against geopolitical rivals. This specific government focus transforms cloud computing from a commercial utility into a strategic national security asset.