While actual percentages and economic terms have not been disclosed, it should work pretty straightforwardly. Nvidia provides a take-or-pay commitment that it rents, say, 30% of the capacity of a newly built facility and a minimum revenue guarantee over a period of six years. If the demand is strong and the facility rents 80% of its capacity, well exceeding the minimum revenue guarantee, Nvidia does not need to absorb the guaranteed capacity, and because revenue exceeds the agreed floor, Nvidia receives a percentage of the excess revenue. If the demand is weak and the facility can only rent 20% of its capacity, running well below the guaranteed revenue level, Nvidia's take-or-pay obligation would require it to cover the difference between actual revenue and the contracted minimum according to the specific agreement. Alternatively, Nvidia could rent back unused compute capacity for its own needs and cover the difference between the actual and guaranteed revenue level.
While at least some participants were reportedly irritated with Nvidia's alleged control of tenants, the program has proven to be quite a success so far. As of late July, just weeks after formally announcing the program, Nvidia had committed $36 billion in these new agreements that run for six years.
"Our commitments, which are typically six years in duration, totaled $36 billion as of July 26, 2026," an Nvidia filing with the Securities and Exchange Commission reads.
Nvidia has not disclosed which portions of monetizable capacities it typically commits, so it is impossible to figure out the value of the hardware it intends to supply under the $36 billion commitments.
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Anton Shilov is a contributing writer at Tom\u2019s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends. ","collapsible":{"enabled":true,"maxHeight":250,"readMoreText":"Read more","readLessText":"Read less"}}), "https://slice.vanilla.futurecdn.net/13-4-25/js/authorBio.js"); } else { console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); } Anton Shilov Social Links Navigation Contributing Writer Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/artificial-intelligence/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/artificial-intelligence/nvidia-denies-pausing-ai-cloud-commitments-initiative-after-reported-partner-backlash-report-claims-company-told-cloud-providers-it-could-only-lease-its-gpus-to-nvidia-approved-customers#main
- https://www.tomshardware.com/membership
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Informational only. No financial advice. Do your own research.