NVIDIA Says Two Mysterious Customers Accounted for 39% of Revenue in Q2

According to NVIDIA, nearly 40% of its revenue in the second quarter came from just two customers. A filing was submitted to the Securities and Exchange Commission.

On Wednesday, the chipmaker reported record revenue for the quarter ended July 27, reaching $46.7 billion, a 56% increase year-over-year, primarily driven by the AI data center boom. However, follow-up reports highlighted that this growth appears to stem largely from a small number of clients.

Specifically, NVIDIA stated that one client accounted for 23% of total revenue in the second quarter, while another contributed 16%. The document did not reveal the identities of these clients, referring to them only as “Customer A” and “Customer B.”

In the first half of the fiscal year, NVIDIA noted that Customer A and Customer B represented 20% and 15%, respectively, of total revenue. The company added that four other clients accounted for 14%, 11%, another 11%, and 10% of revenue in the second quarter.

In the filing, the company described these as “direct” clients—such as original equipment manufacturers (OEMs), system integrators, or distributors—who purchase chips directly from NVIDIA. Indirect clients, such as cloud service providers and consumer internet companies, acquire NVIDIA chips through these direct clients.

In other words, major cloud service providers like Microsoft, Oracle, Amazon, or Google are unlikely to be Customer A or B—although these companies may indirectly be responsible for those substantial expenditures.

In fact, NVIDIA’s Chief Financial Officer, Colette Kress, stated that “large cloud service providers” accounted for 50% of NVIDIA’s data center revenue, which itself made up 88% of the company’s total revenue, according to CNBC.

What does this mean for NVIDIA’s future outlook? Dave Noworski, an analyst at Gimme Credit, told Fortune that while “the concentration of revenue among such a small group of customers does pose significant risk,” the good news is that “these customers have strong cash positions, generate substantial free cash flow, and are expected to invest heavily in data centers in the coming years.”