Nvidia Is Not Just Selling AI Chips: Its Latest Deals Show Where The Next Growth Wave May Come From

According to BMO Capital, Nvidia’s potential upside doesn’t lie in its leadership alone, but also in being a ‘leading supporter’ of the AI ecosystem.

• Nvidia is moving beyond GPUs, betting on the infrastructure and startups driving the next phase of AI.
• Cloverleaf adds another data center bet, with Nvidia taking a minority stake to accelerate AI factory development.
• Rebellions could deepen Nvidia’s inference push, with Bloomberg reporting talks over a potential deal.

Nvidia (NVDA) is increasingly doing more than selling the chips powering the artificial intelligence boom. On Friday, the company announced a strategic partnership with Cloverleaf Infrastructure to accelerate AI data center development and backed a $250 million funding round for AI data center startup Starcloud.

The announcements came alongside reports of Nvidia's potential moves elsewhere in the AI ecosystem. Bloomberg reported Friday that Nvidia is in talks with South Korean AI chip startup Rebellions about a potential deal, while Newcomer reported that the company struck a multibillion-dollar agreement with AI startup Poolside.

According to BMO Capital, Nvidia’s potential upside doesn’t lie in its leadership alone, but also in being a ‘leading supporter’ of the AI ecosystem. In a note to investors cited by TheFly, the firm initiated coverage of Nvidia with a price target of $340 and an ‘Outperform’ rating. 

NVDA stock edged 0.2% lower in midday trade, on track to clock six consecutive sessions in the red. The shares haven’t seen a losing streak this long since the last week of April. BMO’s price target implies a potential upside of over 57% from current levels.

Nvidia Moves Closer To The AI Infrastructure Buildout

Nvidia's partnership with Cloverleaf gives it another foothold in the physical infrastructure layer supporting AI computing. 

Cloverleaf focuses on developing the sites and foundational infrastructure needed for large-scale data centers. Under the partnership, Nvidia made a minority investment in the company and will work with Cloverleaf to advance infrastructure supporting AI factory development.

Earlier this week, Nvidia announced a $1.5 billion investment in SB Energy and a 4.25-gigawatt infrastructure agreement for a data center campus in Ohio where OpenAI will be the primary tenant.

The investments address one of the AI industry's growing constraints. Building more advanced computing systems requires more than GPUs. Developers also need access to land, power, grid connections and data center capacity.

Starcloud fits into the same broader strategy. The AI data center startup's $250 million Series A round gives Nvidia another investment in infrastructure designed around the rapid growth in AI computing.

Nvidia has been increasingly explicit about this shift. Earlier this month, the company announced partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR aimed at mobilizing more than $500 billion in third-party capital for AI infrastructure. 

Nvidia Is Building Positions Across The AI Stack

Nvidia’s reported talks with Rebellions could involve a partnership, investment or acquisition, though the talks remain preliminary. Rebellions develops AI accelerators focused on inference, the process of running trained models and generating responses for users. 

Inference is widely viewed as a major source of future computing demand as AI applications move from model development into broader commercial deployment.

Nvidia has also reportedly struck a major arrangement with Poolside, an AI startup focused on building models for software development. The reported deal would give Nvidia deeper exposure to AI models and talent while potentially expanding the workloads that ultimately require large amounts of computing power.

The common thread across Cloverleaf, Starcloud, Rebellions and Poolside is Nvidia's effort to participate in more parts of the AI ecosystem. Notably, ‘The Big Short’ investor Michael Burry has warned that Nvidia’s “circular financing” approach could be another housing crisis in the making.

Retail Awaits Nvidia Q2 Earnings

On Stocktwits, retail sentiment around Nvidia trended in ‘extremely bearish’ territory over the past day. Most retail traders on the platform were waiting on chief executive Jensen Huang’s comments at Nvidia’s second quarter (Q2) earnings next week. 

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Wall Street is expecting Nvidia to report earnings per share (EPS) of $2.09 on revenue of $92 billion. NVDA shares have gained over 13% this year and more than 23% in the last 12 months. 

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