CNBC’s Jim Cramer said Monday. Nvidia’s Growing business with sovereign nations could help ease investor concerns about the company’s reliance on a small number of hyperscale customers.
“NVIDIA doesn’t want to be hostage to customers who are doing everything in their power to get out of NVIDIA,” the “Mad Money” host said. “We’re trying to turn everyone into a customer.”
Investors are aware that major cloud providers such as: Amazon and alphabet Developing its own AI chips could ultimately reduce its dependence on Nvidia. But Kramer said NVIDIA is increasingly finding new sources of demand through its sovereign AI efforts as governments around the world race to build domestic artificial intelligence infrastructure.
CEO Jensen Huang has spent much of the past year driving these efforts globally. Cramer said countries including Singapore, India, Japan, Switzerland, Germany, Taiwan, Israel, Qatar, the United Arab Emirates and Saudi Arabia are investing in sovereign AI projects powered by Nvidia technology.
Unlike hyperscalers, these customers aren’t necessarily focused on generating immediate financial returns, Kramer said.
“We’re constantly hearing that hyperscalers that are buying Nvidia chips are losing money on their purchases,” he said. “But all of these countries are also buying NVIDIA products and are not looking for immediate profits.”
The distinction is important as Nvidia’s customer base expands now that some of Nvidia’s biggest buyers are working on competing chips. Sovereign AI already accounts for about 14% of Nvidia’s business, Cramer said, and he believes this opportunity could become even more meaningful as projects currently in development come online.
“Countries are buying these chips en masse for their own sovereign AI programs, and that alone will reduce Nvidia’s dependence on a few large hyperscalers,” Cramer said.
