Nvidia Booked Nearly $194 Billion From Data Centers. How Much of It Reaches a Paycheck?

SPEAKER_1 (0:00)

Surviving AI is a podcast about super intelligence and the people selling you a date for it. Every week, we trace the claim, who measured it, who paid for it, and who collects. Then we ask what it means for the person in your seat. When we get it wrong, we say so out loud. Not doom, not hype. Signal you can act on. That's agency.

Texas has told its state environmental agency to pause every permit tied to a data center until the state's grid operator finishes its review, and the governor's letter says these projects must cover all electrical infrastructure costs and result in lower residential electric bills.

A major grid operator asked to buy backup power for data center growth, and the federal regulator accepted only part of the plan, said how it splits the costs may be unjust, and suspended it. And in Finland, a national agency has called on the company behind two planned Google data centers to suspend site work, including tree removal and soil stripping until the environmental assessments are finished. Three stories, three breaks, and one question underneath all of them. Who pays for the buildings that run AI, and who gets paid? Is this a tide that lifts all the boats or revenue captured by a few?

Carlo Thompson (1:26)

So welcome to season eight. We're starting out this one with somewhat of a thought piece. It feels somewhat similar to the older episodes that we had on the model companies themselves, wanting to run like a traditional organization. So that means that they need to see some sort of regulatory or insurance cover to operate without the specter of like lawsuits hanging over their heads. This one is more on the utility of the data centers, which is a pretty dicey topic, right? Because you know how data centers is getting framed in the news. But the idea is that by the virtue of all of the money getting appointed at data centers, that that could be an economic driver for the country in a whole.

Now, there are cracks and lack of information in this whole premise, right? So we'll lay it all out and let you decide. So in order to lay it out, we'll start with something that we do know.

And that's about the company at the center of all of this, Nvidia.

SPEAKER_1 (2:30)

If we're following the money, Nvidia is the absolute starting point. I mean, the number is staggering. They booked nearly $194 billion in data center revenue for the fiscal year ending January, 2026

That's about 90 percent of their total business. But the real question for our ledger is what happens to the dollar, how much of that actually reaches a paycheck, and how much just stays at the top?

Carlo Thompson (2:55)

And that's a pretty high number, right? I don't know if that's a global number or not. But it's a pretty high number for Nvidia. And quick disclaimer, I'm an investor in Nvidia, so there's that. Okay. But it is a staggering number, the amount of revenue that Nvidia is getting from this. Now, my framing is that not all of that is just going into shareholder's pockets, but maybe some of it is.

I could see where the stock is going higher and higher, but it is what it is. That in itself, I think, is an economic driver, right? Because the people that are selling stock or buying Nvidia stock could see an increase in their stock, right? And if they sell it, then they have more money than they went to it with it.

So the thing that I would want to know is where exactly the money that they're making Nvidia is actually going.

SPEAKER_1 (3:55)

If we break down that Nvidia dollar, the split is actually pretty stark. It costs them about 29 cents to make the chip, and another 11 cents goes to research, sales, and administration. That leaves about 60 cents of every single dollar as operating profit. So when you see those massive revenue headlines, the reality is that more than half of the money is staying in the company as profit before taxes even hit the table.

Carlo Thompson (4:21)

Now folks, listen, take this with a grain of salt, right? Go research this stuff for yourself. That's what this whole thought piece is about, is about giving you information so that you could do your own research.

But 60% of operating profit, right? What's the first thing that Nvidia pointed this at? They pointed it at stock buybacks, which for me, being an investor, amounted to the stock price going up, okay? Now if I go sell that now, I got some more money than I actually went into it with it.