NVIDIA Corp (NASDAQ: NVDA) expanded its open-source artificial intelligence strategy with the release of Nemotron 3.5 Lightning, a lightweight model designed to run on a single GPU. The move aims to lower barriers to entry for developers, thereby increasing demand for NVIDIA’s computing hardware.

CEO Jensen Huang argued that wider access to AI models accelerates innovation and drives greater hardware usage. "Free AI should be great for hardware," Huang told Axios. "Free AI should be great for chips."

New Open-Source Tools

The Nemotron 3.5 Lightning model allows companies to download, use, and modify the software without permission or fees. It is specifically designed for autonomous AI agents. Early adopters include CrowdStrike, CodeRabbit, and Harvey, which have tested and customized the model.

NVIDIA also introduced NeMo Switchyard, a software tool that selects the most cost-effective and suitable AI model for specific tasks. This launch follows Huang’s public urging of U.S. policymakers to avoid premature restrictions on open-weight models, particularly those developed in China.

Policy And Competition

Huang entered the policy debate after China’s Moonshot AI introduced Kimi K3, raising national security concerns in Washington regarding model distillation. NVIDIA joined other U.S. technology firms in opposing restrictions on open models.

Days later, NVIDIA launched an AI safety consortium with Microsoft Corp (NASDAQ: MSFT) to explore open models in cybersecurity. The company faces competition from Meta Platforms Inc (NASDAQ: META), which released Muse Glimmer and plans to open weights for Muse Spark 1.2. Chinese developers including DeepSeek and Alibaba also offer competing open models.

Earnings Outlook

NVIDIA is scheduled to report earnings on August 26. Analysts expect earnings per share of $2.07, up from $1.04 a year earlier. Revenue is projected at $91.82 billion, compared with $46.74 billion in the year-ago period.

The stock trades at a price-to-earnings multiple of about 34.5. Wells Fargo maintained an Overweight rating with a $315 price forecast on August 11. KeyBanc raised its price forecast to $330 while maintaining an Overweight rating on July 14. China Renaissance initiated coverage with a Buy rating and $319 price forecast on June 5.

What the Numbers Show

Analyst estimates indicate that NVIDIA’s revenue is projected to nearly double year-over-year, rising from $46.74 billion to $91.82 billion. This growth trajectory supports the company’s high valuation multiple of 34.5, suggesting that market participants expect sustained double-digit expansion in AI infrastructure spending despite increasing competition from open-source alternatives.

Goldman Sachs Group Inc. (NYSE: GS) is reportedly in talks with potential investors to participate in Nvidia Corp.’s (NASDAQ: NVDA) initiative to unlock more than $500 billion in third-party capital for AI infrastructure. According to Reuters, the bank aims to supply junior capital and private credit while helping place debt into both private and public markets. Asset managers involved in the partnership plan to retain a sizable share of the financing.

Nvidia CEO Jensen Huang unveiled the plan on Monday alongside Apollo Global Management Inc., BlackRock Inc., Blackstone Inc., Brookfield Asset Management Inc., Goldman Sachs, and KKR & Co. Inc. In a CNBC interview, Goldman CEO David Solomon stated that Huang approached the bank with the idea for the financing structure, which Goldman welcomed. Solomon noted that the bank has advised Nvidia on its $6.9 billion acquisition of Mellanox Technologies and served as a joint book-running manager on Nvidia’s June $25 billion bond sale.

Strategic Partners and Capital Pools

The collaboration integrates Nvidia’s accelerated computing platform with the long-term capital capabilities of leading alternative asset managers and investment banks. Each partner has committed to creating dedicated financing structures to support the deployment of Nvidia compute assets. The effort aims to help hyperscalers, AI labs, and enterprises fund data centers through institutional credit and private investment.

Jim Zelter, President of Apollo, noted that modern compute has emerged as a scarce, mission-critical asset class. Larry Fink, Chairman and CEO of BlackRock, added that the partnership deepens their existing relationship and connects long-term capital to essential infrastructure.

Market Sentiment and Skepticism

Despite the institutional backing, the financing model faces scrutiny. Famed investor Michael Burry sharply criticized the initiative, labeling it a "Wall Street stunt" that relies on opaque private credit arrangements. Burry warned that the deal involves Nvidia taking 25% stakes and providing residual value guarantees on chip purchases, arguing that the structure may not offer genuine diversification or risk mitigation.

The financing model treats Nvidia’s AI infrastructure as an "investable asset." However, unlike traditional infrastructure, cutting-edge GPUs depreciate quickly as newer chips arrive. Ben Emons, founder of FedWatch Advisors, estimates that investors may demand high-yield returns of roughly 11% to 17% to compensate for this depreciation risk, particularly if Chinese chipmakers offer cheaper alternatives. Emons also flagged China’s cheaper chips as a risk to GPU collateral values underpinning the debt.

Jensen Huang argues that Nvidia’s CUDA software ecosystem can keep older GPUs productive for longer, mitigating some depreciation concerns. Additionally, U.S. restrictions have limited access to leading Chinese AI chips, including Huawei Technologies’ Ascend processors, providing a temporary competitive moat.

Stock Performance

According to Benzinga Pro data, Goldman Sachs closed at 1,042.63, up 0.52%, on Thursday, while Nvidia closed at 225.30, up 0.54%. Nvidia’s market cap stands at $5.45 trillion with a year-to-date gain of 19.30%. Goldman Sachs has a market cap of $303.58 billion with a year-to-date gain of 14.03%.

Bank of America analyst Vivek Arya maintained Nvidia as a "top pick" with a $350 price target. BofA forecasts quarterly revenue of $94 billion to $95 billion, roughly $3 billion to $4 billion above the company’s $91 billion guidance.

What the Numbers Show

The divergence between bullish analyst estimates and cautious market sentiment highlights the complexity of Nvidia’s new financing model. While Polymarket assigns only a 9% chance that Nvidia shares will close above $250 by Aug. 31, Bank of America projects significant revenue growth. The key risk lies in the durability of GPU values as collateral; if Chinese competitors successfully scale cheaper alternatives, the high-yield returns demanded by investors could pressure the profitability of these financing structures. This dynamic underscores the tension between rapid technological obsolescence and the long-duration nature of institutional capital.

Regulatory and Forward-Looking Disclosures

These partnerships remain subject to the execution of final agreements. The press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 for Nvidia, Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR. These statements involve risks and uncertainties, including global economic conditions, technological development, competition, and regulatory changes. Investors are cautioned that actual results could differ materially from those anticipated in these forward-looking statements.