WSJ Tech News Briefing Summary
Episode: "Nvidia’s Move Into Cloud Computing Is Making Things Awkward in Silicon Valley"
Release Date: June 27, 2025

1. Nvidia’s Disruption in the Cloud Computing Landscape

In the latest episode of WSJ Tech News Briefing, host Victoria Craig introduces a pressing issue in the cloud computing sector: Nvidia's strategic expansion into cloud services is causing significant ripples among established industry players.

Asa Fitch, the WSJ "Heard on the Street" columnist, delves into the core of the disruption:

"It's ruffling feathers because here's this company that's important in AI and now it's getting on the turf of some other established players who have made a lot of money in the cloud computing business over the years."
(01:17)

Nvidia launched DGX Cloud two years prior, aiming to provide AI infrastructure by controlling both the hardware (chips and equipment) and the software stack. This approach allows Nvidia to lease its equipment directly to end-users, effectively positioning itself not just as a hardware supplier but as a cloud service provider. Fitch explains:

"DGX Cloud is a service that Nvidia launched two years ago... they wanted to do this because Nvidia felt that they could go direct to the customers, the people who are using AI, specifically doing training in AI."
(01:46)

2. Impact on Major Cloud Providers

Nvidia's foray into cloud computing isn't occurring in a vacuum. Major cloud giants like Amazon, Microsoft, and Google have long dominated the market, each generating substantial annual revenues (Amazon's cloud business surpasses $100 billion). Fitch highlights the tension this creates:

"Nvidia has developed it quite well over the past couple of years. It's also tried to nurture other competitors to the big established cloud players... It's mounting a real challenge to the status quo in the cloud and that's ruffling a lot of feathers."
(03:30)

Victoria Craig probes further into the dynamics between Nvidia and these incumbents:

"They're kind of in a pickle because for them, they need access to Nvidia's chips because they themselves want to have competing services... They need Nvidia for that. So they have to keep the relationship with Nvidia cordial or friendly."
(03:38)

As these cloud giants begin developing their own AI chips, Nvidia's strategy with DGX Cloud can be seen as a protective measure to sustain its hardware sales amidst growing competition:

"Could see Nvidia setting up this cloud business as a sort of insurance policy because it can't really rely in the long term on these cloud players... Those companies... are developing their own AI chips that eventually could replace Nvidia's AI chips."
(04:11)

3. Legal Challenges in Hiring Algorithms

Shifting focus, the episode also addresses a significant legal battle concerning AI-driven hiring processes. Derek Mobley, an IT professional from North Carolina, alleges that Workday's applicant tracking system discriminates against him based on race, age, and disability.

Lauren Weber, WSJ reporter covering workplace issues, provides an in-depth look:

"Derek Mobley... applied for more than 100 jobs... he suspected that there was something going on with the algorithm in Workday's applicant tracking system... he filed a lawsuit... alleging that he had been discriminated against on the basis of race, age and or disability."
(08:00)

Workday defends its practices, attributing rejections to applicants not meeting employer-specified qualifications:

"What are their requirements? What are the preferred qualifications?... it's because he's not meeting the qualifications. That is Workday's argument."
(08:30)

The judge's ruling allows the case to proceed as a collective action, potentially involving millions of job seekers over 40 years old:

"He has ruled that the case can be a collective action... that's open to interpretation, but can join the suit that is potentially millions and millions of people."
(09:48)

Weber underscores the broader implications for the job market's fairness:

"The question, is the job market fair?... it's an incredibly opaque process and it leaves a lot of people feeling like, was this process fair?"
(08:46)

4. IBM’s Perspective on Trustworthy AI

In addition to these stories, the briefing includes insights from Hrithika Gunner, IBM's General Manager for Data and AI, focusing on building trustworthy AI systems.

Gunner emphasizes the importance of managing unstructured data and implementing robust governance:

"Generative AI has allowed us to unlock the opportunity to be able to take the 90% of data that is buried in unstructured formats... essential for organizations as we go forward."
(05:09)

She further outlines the steps organizations should take to ensure AI reliability and safety:

"Understanding what kind of policy enforcement do you want to have on the right guardrails on privacy enforcement?... robust guardrails for safety and security."
(12:15)

Gunner highlights the cyclical benefits of proper AI governance:

"We end up seeing a flywheel effect of more AI that is actually built and infused into applications, which then yields a better, more engaging, innovative set of capabilities within these companies."
(12:36)

This episode of WSJ Tech News Briefing provides a comprehensive look into the evolving dynamics of cloud computing influenced by Nvidia's strategic moves, the ethical and legal challenges posed by AI in hiring practices, and the critical importance of trustworthy AI governance as advocated by industry leaders like IBM.