Nvidia's Blackwell AI chip. [Nvidia website]
Nvidia's Blackwell AI chip. [Nvidia website]

Nvidia generates 44% of its sales from just three customers, raising concerns about its heavy dependence on a small number of buyers.

The Information, citing analysis of Nvidia's first-half disclosures for fiscal year 2027 (February 2026–January 2027), reported Sunday (local time) that the chipmaker's top customer accounted for 16% of sales, the second for 15%, and the third for 13% — meaning the three largest customers together represent 44% of total sales.

In fiscal year 2026 (February 2025–January 2026), the top two customers combined for 36% of sales. In fiscal year 2023 (February 2022–January 2023), no single customer exceeded a 10% share, with revenue spread broadly across buyers in the single digits. The concentration has grown sharply over three years. Including accounts receivable, the top five customers accounted for 70% of total sales in the first half of fiscal year 2027.

The Information said the growing dominance of a handful of customers is stoking concern among investors, as heavy reliance on so few buyers leaves the company exposed to significant damage if any one of them pulls back. Michael Burry — who rose to fame for predicting the 2008 subprime mortgage crisis — has also flagged Nvidia's deepening customer concentration as a key risk factor in recent months.

Dell and Hon Hai Technology (Foxconn) are among the companies most likely counted among the top three customers responsible for 44% of Nvidia's sales; both sell servers equipped with Nvidia chips to a wide range of businesses. SpaceX, Meta Platforms and Microsoft are also likely in the top tier. All three are developing their own chips, which could lead them to reduce purchases of Nvidia chips in the future.

Revenue from the data center segment — where AI chip sales are recorded — surged from $15 billion in fiscal year 2023 to $193.7 billion in the current fiscal year. The market expects data center revenue to double year-on-year in fiscal year 2027.

Nvidia's primary customers are cloud companies. In February, Nvidia Chief Financial Officer Colette Kress said the five largest cloud providers accounted for more than 50% of data center revenue.

The Information reported that Nvidia has been investing in so-called "neo-cloud" companies such as CoreWeave and Nebius in an effort to reduce its dependence on a small number of customers.


kate01@heraldcorp.com