Nvidia Halts Arbitrum Deal, Reinforces Crypto Exclusion

Nvidia has paused a planned partnership with Arbitrum , a Layer 2 network, highlighting its continued exclusion of crypto projects from its flagship AI programs.

The move comes as one of the world’s leading chipmakers, known especially for its powerful GPUs (graphics processing units), tightens its policies, excluding crypto-associated projects from its ecosystem of supported startups.

Arbitrum, also home to a growing number of decentralized AI projects, has been removed from Nvidia’s Inception accelerator program, which supports AI startups with infrastructure credits and mentorship.

Nvidia Tightens Policies, Excludes Crypto Projects 

Earlier this month, Arbitrum was preparing to announce a major milestone: being named Nvidia’s exclusive Ethereum partner for its new Ignition AI Accelerator, a spinoff of the Inception program. This would have granted Arbitrum access to Nvidia’s AI resources and support, making it Nvidia’s exclusive Ethereum partner in the Ignition AI Accelerator program.

However, just before the public announcement, Nvidia requested that Arbitrum pause the news, without providing a reason.

This move from the American tech giant signals its continued hesitation toward officially partnering with crypto-related projects.

Nvidia’s application rules for its Inception program recently confirmed that companies associated with cryptocurrency do not qualify for membership. The program requires applicants to be startups established no longer than 10 years, and excludes consulting companies, cloud service providers, distributors, and publicly listed companies.

Nvidia’s Strategic Shift Away from Crypto

There are several theories within the crypto community about why Nvidia is avoiding crypto.

One possible explanation is that Nvidia is focused on risk control and brand alignment. By excluding crypto startups, they avoid regulatory headaches and protect their reputation while focusing on AI and enterprise investments, according to an AlvaApp profile on X.

The chipmaker, whose GPUs are used for crypto mining , has a history of skepticism towards the industry. During the 2017–2018 crypto boom, Nvidia saw massive demand for GPUs from Ethereum miners and ramped up production. However, when crypto prices crashed, demand vanished, leaving Nvidia with unsold inventory and falling revenue. The company later paid a $5.5 million SEC fine for not fully disclosing its crypto-related earnings.

In 2023, Nvidia’s CTO made it clear the company doesn’t see much value in crypto, calling AI the real game-changer instead.

The Growing Role of AI

Although no public statistics exist detailing the exact number of Nvidia GPUs used for cryptocurrency mining, industry trends suggest an ongoing shift.

As mining profitability declines, companies like Hive Digital Technologies have started converting tens of thousands of their GPUs to support AI and high-performance computing applications.

Core Scientific, a major mining firm, recently struck a $4.7 billion deal with AI cloud provider CoreWeave to repurpose its data centers for AI workloads.

Arbitrum Price Shows Resilience Despite Nvidia Setback

Despite the news from Nvidia, Arbitrum’s price has remained relatively unaffected. The ARB token rose by 4.5% to a price level of $0.348 on Friday. 

The Arbitrum (ARB) price has shown recovery since its early April lows. Source: TradingView

However, the $1.65 billion market cap blockchain project is still more than 85.5% below its all-time high of $2.40, which was reached in January 2024.

Why This Matters

Nvidia’s decision to distance itself from crypto highlights the growing divide between AI and cryptocurrency, with AI gaining momentum while crypto faces regulatory uncertainty and skepticism from key players in big tech.

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