Jeff Vasishta
3 min read
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Nvidia (NASDAQ:NVDA) is looking beyond Big Tech as it strategizes global expansion by doing deals with foreign governments, the Financial Times reports.
As the innovative chip company behind artificial intelligence, demand for Nvidia’s technology crosses all boundaries — from neighboring Big Tech companies in Silicon Valley to foreign governments. Following Nvidia’s recently announced multibillion-dollar chip agreement with as a part of a deal with the U.S. government to build a large AI infrastructure, the FT reports that such “sovereign AI” deals are a part of Nvidia’s strategy to be less reliant on “hyperscalers” — large cloud computing companies accounting for over half its data center revenue.
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To do this, Nvidia is allowing access to its technology from up-and-coming rivals to enable them to foster relationships with cloud service providers like Amazon (NASDAQ:AMZN) and Google, FT reports. The outlet adds that business relationships with Cisco (NASDAQ:CSCO), Dell (NYSE:DELL), and Hewlett-Packard Enterprise Company (NASDAQ:HPE) will help them enable enterprise customers to create their own IT infrastructure instead of outsourcing to the cloud.
“I’m more certain [about the business opportunity beyond the big cloud providers] today than I was a year ago,” Nvidia CEO Jensen Huang told the FT in March.
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As part of its expansion, Nvidia sees robots as pivotal to introducing AI to practical real-world uses in robotics, drug development and autonomous navigation. The company presented employee-authored literature at a Singapore conference covering these sectors, highlighting the partnerships with Google, GE HealthCare (NASDAQ:GEHC), and General Motors (NYSE:GM), FT said.
Experts question whether the scope of the deals Nvidia just made in Saudi Arabia is feasible on an ongoing basis.
“Is every country going to announce a $10 billion or $50 billion data center like the Saudis? Of course not,” Seaport Research analyst Jay Goldberg told Reuters. “They’re sort of running out of obvious deals.”
