Nvidia’s Cash Strategy Reflects Regulatory Landscape
Nvidia’s (NASDAQ:) explosive growth has created a new challenge: how to deploy an unprecedented amount of cash in a world where scale itself has become a regulatory constraint. The chart below, from The Wall Street Journal, illustrates Nvidia’s massive free cash flow growth.
However, traditional uses of its cash, such as large acquisitions, are increasingly difficult given heightened scrutiny around AI infrastructure and market dominance. Nvidia’s cash strategy is now being shaped as much by regulation as by opportunity.
That dynamic helps explain Nvidia’s recent $20 billion “nonexclusive licensing agreement” with AI startup Groq. Rather than pursuing a full acquisition, Nvidia structured the deal to gain access to talent…
