Nvidia said on Monday that it would spend another $150 billion buying back its own shares, adding to what it said was the largest repurchase in history, as the chip company continues to cash in on a global race to dominate artificial intelligence.
The increase comes four months after the A.I. chipmaker’s board added $80 billion to the company’s buyback program, bringing the total remaining amount authorized to $235 billion.
“Nvidia’s growth is being driven by a once-in-a-generation platform shift to A.I. and accelerated computing,” Jensen Huang, Nvidia’s chief executive, said in a statement.
“Our cash generation gives us the capacity to invest in the technologies that advance this transformation and return capital to shareholders,” he added. “This authorization reflects our confidence in the long-term opportunity ahead.”
Nvidia’s announcement is the latest sign of the extraordinary flood of money into the markets being fueled by the A.I. boom. A host of companies are rushing to build data centers and release new models, spending billions to get ahead.
Share buybacks are viewed as a way to reward investors, including executives and employees, because they can potentially lift stock prices by limiting the supply of shares for sale. But critics say the actions can take money away from potential investments in hiring, construction, or research and development.
Buybacks often suggest that a company believes its stock price is undervalued, said Vivek Arya, a research analyst at Bank of America. In Nvidia’s case, the repurchase will remove excess cash and signal its belief in the broader A.I. ecosystem, which some have criticized for creating a financial bubble.
“By telling you that I’m buying back my stock, I’m essentially conveying my sense of confidence in my future,” Mr. Arya said.
The buyback also brings the company closer in line with more mature companies that frequently return cash to shareholders. Apple has long been a leader in the practice, having announced a $110 billion repurchase in 2024.
Nvidia’s stock price has skyrocketed amid the explosion in demand for A.I. Nvidia’s chips are the centerpiece of giant A.I. data centers, and demand for those chips has become a barometer of growing demand for the technology.
Other companies have been buying tens of billions of dollars’ worth of those chips, making Nvidia the most valuable public company in the world, with a market capitalization of about $5.6 trillion. Nvidia’s stock rose more than 4 percent on Monday.
The buyback follows a company report last month that its revenue more than doubled, to $96.22 billion, for the quarter that ended in July. Just three years ago, Nvidia’s quarterly profit was $6.2 billion.
In August, Nvidia told investors that its projected revenue in the current quarter would increase 90 percent from a year ago to $108 billion, in an indication that the A.I. boom still had plenty of momentum.
Nvidia said it expected to execute the total remaining buyback program through its fiscal year 2028, which ends in late January.
The chipmaker has also placed its deep pockets on one side of a debate over how A.I. should be developed and shared. Nvidia has argued that A.I. developers must be able to make open-source models, which can be freely downloaded and modified, so people can further develop technologies and build new businesses. It is also relying on such models to increase demand for its chips.
The debate over open-source models has heated up since July, when OpenAI’s A.I. systems went rogue and broke into Hugging Face, a library of open A.I. models, and elevated concerns about A.I. safety. This month, Nvidia agreed to spend $12.9 billion to buy Hugging Face.
On Monday, Nvidia introduced open-source software to monitor and control the actions of A.I. agents, which can do tasks by themselves. The company said recent hacks by A.I. agents had made such software more essential.
“A.I.’s extraordinary potential for society will only be realized if we solve A.I. safety,” Mr. Huang said in a blog post.
- Credits: The New York Times
- Author: Lauren McCarthy and Kalley Huang
- Photo: Manuel Orbegozo
