Nvidia has quietly pulled back from its ambitious plan to take on the biggest cloud providers, Amazon Web Services, Google Cloud and Microsoft Azure, in a full-blown cloud services war.
The chip-making giant is reorganising its cloud division, known as DGX Cloud, to focus more on internal needs than on attracting outside customers, as reported by the Times of India. That’s a big change from the vision Nvidia CEO Jensen Huang laid out just a couple of years ago, when the company appeared ready to challenge the “big three” dominating cloud infrastructure.
Instead of offering DGX Cloud as a public service, Nvidia is integrating its cloud team into the company’s core engineering group. That means the platform will mainly serve Nvidia engineers working on AI model development rather than acting as a full-blown cloud competitor.
Industry insiders say the decision stems from a mix of technical hurdles and strategic concerns. One major challenge was trying to run DGX Cloud across data centres owned by different cloud providers. Fixes that worked in, say, Amazon’s infrastructure didn’t always translate to Microsoft or Google facilities, making support tricky.
Another factor: Nvidia’s biggest cloud customers are also its biggest buyers of AI chips. As one internal source explained, expanding DGX Cloud too aggressively could “alienate” those customers—a risk Nvidia wasn’t willing to take given its dominant position in AI hardware sales.
Nvidia had once suggested DGX Cloud could bring in up to $150 billion in revenue down the road. But the company’s latest moves signal that chasing cloud market share isn’t worth the potential fallout.
Instead, Nvidia will double down on its strengths—supplying AI accelerators to other cloud providers and using DGX Cloud to boost its own research and development.
The company says it will “continue to invest in DGX Cloud” to support internal R&D and help its partners, even if it’s no longer a direct competitor in the public cloud arena.
