Nvidia Commits $279 Billion to Secure AI Memory Supply
Nvidia is spending $279 billion on memory components and acquiring Hugging Face for $13 billion to sustain growth amid severe AI hardware supply constraints.
Nvidia Corporation reported second-quarter revenue of $96.2 billion, a 106% year-over-year increase, driven by a 117% surge in data center revenue. To sustain this momentum, the company has committed $279 billion to supply and capacity agreements through fiscal 2029 to secure high bandwidth memory and server DRAM. This represents a significant increase from the $119 billion committed three months prior, as the company seeks to eliminate bottlenecks for its Blackwell systems and Vera CPUs.
Beyond hardware procurement, the company is expanding its role as a financial facilitator. It has launched a $500 billion third-party capital platform with partners including BlackRock and Goldman Sachs and provided guarantees up to $105 billion for an OpenAI-anchored project in Ohio. Additionally, Nvidia reportedly agreed to acquire the open-source AI model repository Hugging Face for approximately $13 billion to hedge against competitors like Microsoft and Google who are developing proprietary chips.
CEO Jensen Huang stated that AI has reached an inflection point where compute is now generating revenue, though he noted that supply constraints are currently capping growth. While investment banks like Jefferies project revenues exceeding $1 trillion by 2029, some analysts warn of a credit bubble due to Nvidia's aggressive advances to suppliers and investments in its own customers. Meanwhile, supplier SK Hynix warned that memory shortages could persist through 2030, prompting a $4 billion investment in a new Indiana manufacturing facility.
