NVIDIA Corp. (NASDAQ:NVDA) is one of the top 10 AI stocks that will skyrocket.
On July 1, Nvidia Corp. (NASDAQ:NVDA) disclosed a profit-sharing program developed to give model builders, AI startups, and businesses access to Nvidia’s computing framework, without the need for these entities to fund hardware buildouts
Under this arrangement, NVIDIA, in addition to product revenue, will receive a share of cloud revenue based on the capacity it supports, as AI cloud providers deliver NVIDIA-powered solutions to their end users. In a blog post, the company’s Executive Vice President and Chief Financial Officer, Colette Kress, defined income as a repeated, usage-based revenue stream, while noting that it eliminates the need for location selection, building, energy procurement, and hardware installation before accessing hyperscale computing. Nvidia said that this plan highlights a transition in AI demand from model building towards production inference tasks, needing continuous running of infrastructure at scale.
The company also cited that access to high-cost computing resources was restricted historically, even with long-duration commitments. The move comes as the company faces rising competition from specialized AI chips from cloud providers, including Amazon and Alphabet, which are extending access to in-house processors. Nvidia stock dropped 0.5% in premarket trading on July 2.