NVIDIA is significantly altering its cloud strategy, shelving plans for its DGX Cloud division. The division originally aimed to compete directly with major providers, including Amazon Web Services, Google Cloud, and Microsoft Azure. The unit will now serve NVIDIA’s internal engineers for AI model development.
This strategic pivot aims to avoid alienating the cloud giants. These companies remain the biggest buyers of NVIDIA's AI chips, representing a substantial portion of the company’s revenue.
The restructuring follows challenges in gaining significant market share against established players. The company also faced unsustainable pricing for its cloud services. The head of the DGX Cloud business unit has been reassigned, and the team will be integrated into the main engineering organization. This move reverses the ambitious plan CEO Jensen Huang announced in March 2023.