Nvidia to share revenue with cloud providers under new AI compute partnership model
The GPU giant is moving beyond hardware sales by taking a cut of cloud service revenue, starting with a six-year deal in Australia.
Nvidia isn’t just selling shovels anymore. It wants a percentage of the gold.
The chipmaker announced a six-year collaboration with Australian AI cloud provider SharonAI Holdings (NASDAQ: SHAZ) that goes well beyond the typical “we buy your GPUs” arrangement. Under this deal, Nvidia will supply hardware and, critically, take a share of the cloud service revenue that SharonAI generates from the resulting infrastructure.
The deal structure
SharonAI plans to deploy up to 72 megawatts of data center capacity in Australia, starting with an initial installation of 40,000 NVIDIA Grace Blackwell GB300 GPUs. The target is to exceed 55,000 total NVIDIA GPUs by mid-2027.
Nvidia’s revenue from this arrangement comes from two streams: traditional hardware sales, and a recurring cut of the cloud service revenue generated through the infrastructure.
The market liked what it saw. SharonAI stock surged as much as 10% in premarket trading following the announcement. SharonAI subsequently closed a $1.6 billion strategic financing round specifically aimed at supporting the Nvidia collaboration and expanding operations.
Why Nvidia is doing this
This partnership model, which Nvidia is calling the AI Compute Partnership program, represents a deliberate shift toward usage-based revenue streams. The strategy specifically targets what Nvidia sees as “neocloud” providers, regional or specialized cloud companies that aren’t named Amazon, Microsoft, or Google. Nvidia supplies the hardware, takes some revenue risk alongside the partner, and in return gets ongoing exposure to end-user cloud spending.
What this means for investors
Revenue-sharing arrangements create the kind of predictable, subscription-like cash flows that justify higher valuation multiples. The risk is that Nvidia’s income from these deals depends on the cloud provider actually winning customers and generating meaningful utilization of the deployed GPUs. If SharonAI struggles to fill 72 MW of capacity in the Australian market, Nvidia’s revenue share from the deal shrinks accordingly.