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This anticipated plateauing of data center spending raises concerns for NVIDIA, which relies heavily on providing hardware solutions but lacks a recurring revenue model. If Microsoft cuts back on acquisitions of data centers in the coming years, NVIDIA's growth could be impacted, highlighting the dependency of GPU demand on cloud service provider expansions.
Microsoft’s Future Commitments and Acquisition Potential
Rumors abound regarding Microsoft's potential interest in acquiring TikTok, raising questions about the viability of such a purchase in light of their significant cash reserves currently estimated at $70 billion. Microsoft might leverage a mix of cash, stock, and long-term debt, similar to the strategies they employed in the Activision Blizzard acquisition.