Nvidia’s customer concentration is becoming a real business risk

The Information flags Nvidia’s increasing dependence on a small number of enormous customers. Nvidia’s own newest filing makes the scale clear: just three direct customers accounted for 16%, 15% and 13% of first-half FY2027 revenue — 44% combined. A year earlier, the two disclosed >10% customers represented 20% and 15%, or 35%.

These are “direct customers,” which can be ODMs, system integrators or cloud providers rather than the ultimate company consuming the GPUs. Nvidia separately says some indirect end customers individually account for more than 10% as well, so economic demand may be even more concentrated than the direct-customer numbers imply.

That helps explain Jensen Huang’s increasingly aggressive efforts to create new buyers — including investments in neoclouds and AI companies that then buy Nvidia infrastructure, the point highlighted by The Information. It broadens demand, but it also makes analysing demand quality harder: the industry increasingly contains Nvidia financing or supporting companies whose growth then generates Nvidia sales.

Nvidia’s biggest vulnerability may increasingly be not AMD taking share, but a handful of customers deciding that the next marginal $50bn of AI infrastructure is not worth building.