Nvidia Invests $18 Billion and Expands AI Deals in August

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Key Takeaways

1Nvidia is committing $18 billion in capital investments for the remainder of fiscal 2027

2$1.5 billion invested in SB Energy and a stake taken in Cloverleaf in August

3Cash payment of $2.94 billion related to the agreement with the startup Groq

💡Why it matters — Management asserts that these investments are generating activity on the Nvidia platform and will provide good returns with limited risk.

Nvidia has committed $18 billion in capital investments for the remainder of its fiscal year 2027 and ramped up operations in August, spanning from energy to software. While critics point to a circular financing model, management asserts that demand and expected returns mitigate the risk.

Colette Kress Defends Investments and Downplays Risk

Critics have raised concerns about circular financing surrounding Nvidia. Luke Lango believes the company acts as a supplier, financier, and shareholder of firms that purchase its chips, which could expose its revenues and stakes in the event of a slowdown. During the earnings call on Wednesday, Chief Financial Officer Colette Kress responded that the company views the situation differently. She claims these investments, valued in light of strong demand, the business they generate, the ecosystem built around the Nvidia platform, and the expected returns, will be excellent and that the risk is limited.

Energy, Software, and $2.94 Billion Payment to Groq

In August, Nvidia injected $1.5 billion into SB Energy and acquired a stake in Cloverleaf Infrastructure, two companies working to address land and energy limitations for data centers. The group also signed a multi-billion dollar contract with coding startup Poolside. Additional deals are reportedly under consideration with Perplexity (specializing in AI research) and Rebellions (a Korean inference chip supplier). Furthermore, Nvidia revealed a cash payment of $2.94 billion related to its agreement with AI hardware startup Groq, an agreement announced in December.

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$18 Billion Committed, Over $500 Billion Targeted in External Financing

Nvidia anticipates an additional investment of $18 billion in the current fiscal year and clarified in its results that it has $18 billion already committed for the remainder of fiscal year 2027, targeting model manufacturers, infrastructure financiers, and other private companies. The group has collaborated with Wall Street firms to raise over $500 billion in external financing aimed at AI infrastructure. Regarding its stakes, Nvidia held $47.9 billion in private companies at the end of July, more than double the $22.3 billion recorded at the close of the previous fiscal year. The series of agreements initiated in August continues.

In the Face of Chips from Amazon, Google, and Microsoft, Nvidia Expands

Nvidia's expansion comes as major clients, including Amazon, Google, and Microsoft, develop their own chips. Nvidia is further positioning itself in infrastructure, software, and models around its components. Many agreements do not take the form of acquisitions: according to Luke Lango, licensing technologies, recruiting, and minority stakes help avoid certain regulatory and integration constraints. In August, Jensen Huang launched a flurry of agreements and, within weeks, committed billions of dollars, with more deals potentially on the horizon.