Nvidia Stops Competing with AWS, Shifts DGX Cloud to Internal Use

Nvidia is scaling back its DGX Cloud service, shifting its focus from marketing it as a direct-to-enterprise cloud offering to using it primarily for internal research and AI development. The company has stopped attributing its significant cloud spending commitments to DGX Cloud, signaling a strategic retreat from competing directly with major cloud providers like AWS and Microsoft Azure. This change comes as AWS has significantly reduced prices on comparable GPU instances, making Nvidia's premium-priced DGX Cloud less competitive. Instead, Nvidia is emphasizing its Lepton marketplace, which routes GPU workloads to various cloud providers, including AWS and Azure, positioning Nvidia more as an aggregator than a cloud rival. Additionally, Nvidia has allocated $13 billion to purchasing AI chips from other cloud services, aiming to support firms developing AI capabilities rather than expanding its own cloud infrastructure. Overall, Nvidia's strategy now centers on owning the AI stack and demand funnel rather than owning the cloud itself.