SAN FRANCISCO – Nvidia said on Sept 28 it would spend another US$150 billion (S$191 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 chipmaker’s board added US$80 billion to the company’s buyback programme, bringing the total remaining amount authorised to US$235 billion.
“Nvidia’s growth is being driven by a once-in-a-generation platform shift to AI and accelerated computing,” Jensen Huang, Nvidia’s CEO, 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 authorisation 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 fuelled by the AI 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 a company’s stock price by limiting the supply of its shares for sale.
But critics say the actions have only a marginal impact, if any, on the company’s stock price and instead 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 AI ecosystem, which some have criticised 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,” 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 US$110 billion repurchase in 2024.
Nvidia’s stock price has skyrocketed amid the explosion in demand for AI.
Nvidia’s chips are the centrepiece of giant AI data centres, 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 capitalisation of about US$5.6 trillion.
Nvidia’s stock rose nearly 4% on Sept 28.
The buyback follows a company report in August that its revenue more than doubled, to US$96.22 billion, for the quarter that ended in July.
Just three years ago in 2023, Nvidia’s quarterly profit was US$6.2 billion.
In August, Nvidia told investors that its projected revenue in the current quarter would increase 90% from 2025 to US$108 billion, in an indication that the AI boom still had plenty of momentum.
Nvidia said it expected to execute the total remaining buyback programme 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 AI should be developed and shared.
Nvidia has argued that AI 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 AI systems went rogue and broke into Hugging Face, a library of open AI models, and elevated concerns about AI safety.
In September, Nvidia agreed to spend US$12.9 billion to buy Hugging Face.
On Sept 28, Nvidia introduced open-source software to monitor and control the actions of AI agents, which can do tasks by themselves.
The company said recent hacks by AI agents had made such software more essential.
“AI’s extraordinary potential for society will only be realised if we solve AI safety,” Huang said in a blog post. NYTIMES
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This article originally appeared in The New York Times.
