Nvidia is once again disrupting the tech world.

The figures from the financial reports all show that the cloud computing segment is generating huge profits for Amazon, Microsoft, and Google.

However, this "cash cow" is facing an emerging threat with the rise of collaborations among AI cloud computing experts and a new "power broker" in the industry: Nvidia.

The threat is growing.

In 2023, Nvidia launched its own cloud computing service called DGX Cloud. Not stopping there, the chip giant also nurtured a series of startups to compete with large cloud companies, alongside investments in AI cloud computing players like CoreWeave and Lambda.

These moves didn't have a major impact at the time, but a competitive shift was easily foreseeable if computing demand continued to move toward AI and Nvidia remained the industry's primary hardware supplier.

That concern finally became a reality when, at Computex 2025, Nvidia officially introduced DGX Cloud Lepton software, which helps cloud service providers automate the process of connecting developers to computers, supporting the creation and running of services.

According to the WSJ , DGX Cloud has been growing rapidly. When it first launched, UBS analysts estimated the company could grow into a business with annual revenues exceeding $10 billion .

Nvidia, with its own cloud computing service called DGX Cloud, is causing major players in the cloud computing industry to feel uneasy. Photo: Nvidia.

Meanwhile, CoreWeave, which listed on the Nasdaq in March, is forecasting revenue of around $5 billion in 2025.

In reality, these businesses are still limited to a narrow focus on AI computing, and they are still far behind the more than $107 billion in revenue that Amazon's market-leading cloud business will generate in 2024.

However, any challenges in cloud computing would be concerning for Amazon. While the cloud segment accounted for only 29% of revenue in the most recent quarter, it represents over 60% of earnings thanks to its high profit margins.

Microsoft and Alphabet's Google, the next two biggest cloud companies, also have a lot to lose if the cloud computing landscape changes. Growing macroeconomic concerns are fueling caution about IT spending. Google is under antitrust scrutiny in the US, while its biggest cash cow, its search engine, is being challenged by OpenAI.

A complicated relationship and a lesson about dependence.

Under DGX Cloud's unusual deal, the cloud computing giants will purchase and manage the equipment — including Nvidia chips — that forms the backbone of the service.

Nvidia then leases these devices back to enterprise customers. Additionally, the company provides access to AI experts and software as part of the service package.

The WSJ noted that this has put the cloud computing giants in an uncomfortable position. While they can still make money through the deal, they are also being asked to help a service that could become a major competitor in the future.

This has caused many industry giants to hesitate, with Google notably absent from the list of companies entering the DGX Cloud chip leasing market announced in May.

Roy Illsley, chief analyst at technology research firm Omdia, said that joining the deal with DGX Cloud would have made sense for cloud companies a few years ago because their own AI services were not yet well-developed.

"They needed to react to the market as the AI revolution unfolded, and what Nvidia did was provide them with a solution when they hadn't yet sorted things out themselves," Illsley said.

With Nvidia not disclosing revenue or profits, it remains unclear how large DGX Cloud has grown.

An Nvidia GPU server rig. Photo: Bloomberg.

Nevertheless, according to WSJ analysis, in the most recent fiscal year, the chip giant revealed it now has $10.9 billion in multi-year cloud service agreements, up from $3.5 billion in 2024, and much of it is to support DGX Cloud.

If this service becomes profitable—a perfectly plausible scenario given the typically high profit margins in the cloud computing sector—it would already be a major player in the industry.

Nvidia insists that it is not trying to outmaneuver cloud computing giants with DGX Cloud. According to the company, this service is simply intended to help connect customers with Nvidia's AI computing power and expertise in ways that were previously impossible.

That might be true at the moment, but it would be naive to think that Nvidia doesn't have any further plans.

At a minimum, DGX Cloud could give Nvidia a future option to develop a large cloud enterprise and leverage its current power to help shape how AI is developed.

Source: https://znews.vn/nvidia-lai-pha-binh-gioi-cong-nghe-post1563771.html