Nvidia reportedly backs away from its effort to make its own public cloud, team reorg eases friction with customers — chipmaker shifts unit's focus to internal R&D
Nvidia has reorganized its cloud computing group, further scaling back its ambitions to operate a public cloud service that would directly compete with Amazon Web Services.
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Nvidia has reorganized its cloud computing group, further scaling back its ambitions to operate a public cloud service that would directly compete with Amazon Web Services, according to reporting by The Information. The changes include folding the DGX Cloud business into Nvidia’s core engineering structure, under the leadership of SVP Dwight Diercks, who oversees software engineering.
Nvidia is not exiting cloud infrastructure altogether, but is narrowing its scope. Instead of selling GPU compute as a service under its own brand, the company is repositioning DGX Cloud as an internal platform for its engineers, with a focus on chip demand and AI model development.
Preventing channel conflict
DGX Cloud was introduced in early 2023 as Nvidia’s attempt to abstract its flagship DGX systems into a managed service. Hosted initially on infrastructure provided by AWS, Google Cloud, Oracle Cloud, and Microsoft Azure, the service offered dedicated H100-based clusters with Nvidia’s full software stack preinstalled. It offered a straightforward, attractive pitch to enterprise customers, allowing them to rent Nvidia’s preferred AI platform without building their own data centers.
In practice, the model proved difficult to scale. Pricing was high compared to commodity GPU instances, integration with existing cloud tooling was uneven, and support responsibilities were split between Nvidia and its hosting partners. Customers running DGX Cloud across multiple providers faced operational complexity, while hyperscalers themselves were rapidly cutting prices on H100 capacity and rolling out their own managed AI services.
Against that backdrop, Nvidia has now folded the DGX Cloud team into its broader engineering organization under engineering leadership. The group’s remit has shifted toward internal use, including AI model development, software validation, and pre-silicon and post-silicon testing of new GPU platforms.
This makes a lot of sense given that Nvidia’s largest customers are the very companies it would have been competing against should DGX Cloud have continued operating as it was. AWS, Microsoft, Google, and other cloud providers account for a significant share of . Running a first-party cloud service risked creating channel conflict at a time when those customers are committing billions of dollars to Nvidia hardware.
