Nvidia's AI Moat Shifts from Chips to Capital

As the generative AI boom enters its fourth year, competitors such as AMD and Google are gradually eroding Nvidia's technological edge. In response, Nvidia is shifting to a strategy that actively leverages another strength: capital power, beyond just chip performance.

Recently, Nvidia signed an agreement to collaborate with Wall Street financial institutions to push forward a $500 billion financing initiative for GPUs. It also agreed to provide up to $105 billion for the large data center OpenAI plans to build in Ohio, effectively acting as a guarantor for OpenAI's business risks.

This strategy reflects the reality that a small number of hyperscalers account for the majority of purchases amid endlessly growing demand for AI infrastructure. Backed by free cash flow that surged to $48.5 billion in the recent quarter and a strong credit rating, Nvidia aims to solidify its market dominance by maintaining revenue growth of over 55% for 12 consecutive quarters.