Shares of Nvidia (NASDAQ: NVDA) jumped 7% on Thursday after a new sales forecast dispelled concerns about a possible slowdown in AI spending growth. This surge followed Nvidia's report for the second quarter of fiscal year 2027, in which management provided a revenue forecast indicating sustained strong demand.
The price increase was also linked to Nvidia's efforts to attract AI developers using Chinese models. On Wednesday, the company announced improved support for DeepSeek V4 Flash, Alibaba Group (NYSE: BABA) Qwen 3.8, models from Alphabet (NASDAQ: GOOGL) subsidiary Google, as well as Nvidia's own software.
Nvidia Adapts Its Platform for Chinese AI as US Officials Consider New Restrictions
Chinese artificial intelligence models are advancing rapidly towards 2026, and more developers worldwide are beginning to use them. Nvidia is adapting its chips and software, rather than leaving this process to Chinese hardware manufacturers. Huawei, the manufacturer of Ascend processors, and Alibaba have already implemented support for DeepSeek, Qwen, and other open models.
Nvidia named its program a "local AI initiative with optimization for the best open models." The broader goal of the program is to encourage developers to use American computing systems, even if the AI model they chose was created in China.
According to CNBC reports, an Nvidia employee stated: "Supporting models worldwide allows developers to use American technological infrastructure."
The employee added: "Developers using popular American and Chinese models will choose the technology stack for which that model is optimized, so optimization for the American stack is critical."
Nvidia is also opposing initial federal rules regulating the use of open-source artificial intelligence. Microsoft (NASDAQ: MSFT), Meta Platforms (NASDAQ: META), Palantir Technologies (NASDAQ: PLTR), Nvidia, and over 20 other companies signed a letter in July warning authorities against imposing "premature restrictions" on AI models that companies can download, modify, and use.
However, Nvidia acknowledges that policy may create certain challenges. In its latest filing with the U.S. Securities and Exchange Commission (SEC), Nvidia warned that White House rules targeting AI created in China could harm some aspects of its business.
The employee also said: "Developers will play a very important role in creating a successful AI ecosystem. In China, there is one of the world's largest groups of developers creating open-source foundational models. Each model should perform best on the U.S. technology stack, encouraging countries worldwide to choose America."
Nvidia's Unpaid Bills Grow Rapidly as Hugging Face Deal Could Expand Its Software Scope
The quarterly report also presented data monitored by traders. Nvidia's net accounts receivable increased by approximately 63% between January and July, rising from $38.5 billion to $63.1 billion. This means the company recorded many more sales for which customers have not yet paid their debts.
Gil Luria, head of technology research at DA Davidson, told CNBC: "This is something to watch." Gil added: "We need to be very careful because the numbers are very large, and they are taking on really big commitments for a very long term."
Wall Street banks believe the total amount could increase significantly. Bank of America (NYSE: BAC) expects Nvidia's accounts receivable to reach approximately $71 billion in January 2027, then $113 billion in 2028 and $147 billion in 2029. This represents an increase of about 107% from 2027 to 2029.
Morgan Stanley (NYSE: MS) forecasts higher growth. It expects this figure to increase from approximately $78.6 billion in January 2027 to $171 billion in January 2029, representing growth of roughly 117%.
Nvidia's accounts receivable are also concentrated among a small group of buyers. The company reported that five direct customers account for 70% of the total accounts receivable, with the majority coming from major cloud service providers. A year earlier, three direct customers accounted for 56% for the same period.
Meanwhile, yesterday, Nvidia agreed to pay $12.9 billion for the open-source AI platform Hugging Face, citing a source directly familiar with the terms of the deal. Business Insider separately reported that Nvidia was in "talks" to acquire Hugging Face.
Developers use Hugging Face to share, test, and build applications using open-source AI models. If the deal goes through, Nvidia would become the owner of a major platform at the center of this activity. This would also allow Nvidia to move beyond its core GPU manufacturing business and deeper into the software market, where developers themselves decide which models, tools, and computing systems they want to use.
