Shimmy Says: Nvidia Is the Beating Heart of AI
Nvidia is the beating heart of AI — and in this Shimmy Says, Alan Shimel explains why the recent “Could Nvidia default?” clickbait misses the far more consequential story. After $96.2 billion in quarterly revenue, nearly $60 billion in net income, a forecast for approximately 70% growth next year, and a reported $12.9 billion acquisition of Hugging Face, Nvidia is no longer just selling AI chips. It is becoming the supplier, financier, marketplace and circulatory system of the entire AI economy.
Earnings demolish the default premise
Nvidia generated $96.2 billion in revenue in a single quarter, up 106% year over year. Net income hit $59.7 billion. Data center revenue was $89 billion, up 117%. Gross margin held at 75%. Guidance for the current quarter is approximately $108 billion — with no assumed China data center revenue. Management now forecasts roughly 70% revenue growth in fiscal 2028, versus the ~45% Wall Street expected. That is not the financial profile of a company approaching default.
Demand is being locked in years ahead
AWS and Nvidia announced plans to deploy 2 million additional Nvidia GPUs across AWS infrastructure in 2027–2028, on top of the more than 1 million planned to begin in 2026. Anthropic reportedly signed a ~$45 billion, six-year compute agreement with Nscale, running on Nvidia Vera Rubin systems starting in late 2027. Hyperscalers and frontier labs are reserving Nvidia-based capacity years in advance — reinforcing both the durability of demand and the concentration risk at the center of the story.
Why Hugging Face is not a software acquisition
Hugging Face reportedly generates about $150 million in annualized revenue — meaning Nvidia is paying roughly 86 times revenue. That price only makes sense if Nvidia sees Hugging Face as the demand and distribution layer for the open-model economy. Sitting between millions of developers and an enormous library of models and datasets, Hugging Face could direct workloads toward Nvidia hardware, help find customers for unused capacity, and turn Nvidia’s claim that its compute is “fungible” into an operational reality.
The balance sheet becomes a moat
Nvidia disclosed approximately $366 billion in future commitments — $279 billion in supply and capacity commitments alone, up from $119 billion three months earlier, primarily to secure memory. Nvidia said AI labs supported through its balance sheet could account for roughly one-quarter of its business next year. Its financial support for the AI ecosystem is no longer a side program — it is becoming material to Nvidia’s growth.
The risk is concentration, not default
AI labs depend on Nvidia for compute. Neoclouds depend on Nvidia systems and financing. Infrastructure developers depend on its commitments. Memory suppliers build around its forecasts. Hyperscalers depend on Nvidia to expand their AI businesses. Developers may increasingly depend on an Nvidia-owned marketplace. Nvidia can almost certainly absorb an individual customer failure. The more serious scenario is several assumptions failing together — and that would ripple through the entire AI economy.
The indispensability trap
Becoming indispensable is the ultimate competitive achievement. But indispensability pulls responsibilities and risks toward you. Nvidia has cemented itself as the indispensable infrastructure company of the AI era. Nvidia is the beating heart of AI. The risk worth watching is not whether that heart suddenly stops — it is how much of the AI economy now depends on it never missing a beat. That’s what Shimmy says.
