NVIDIA is giving away powerful AI for free: a brilliant strategy that generates billions
On June 4, 2026, NVIDIA released its largest open-source AI model — Nemotron 3 Ultra. But the most interesting aspect here is not so much the model itself, but the business strategy: the company gives it away for free, yet earns more from it than competitors do with paid subscriptions.
Nemotron 3 Ultra is not just another "scaled-up transformer." It is a hybrid architecture combining three approaches: Mamba-2 layers, Attention layers, and Latent Mixture of Experts (Latent MoE). The latter mechanism directs each request only to the relevant "specialists" within the model, radically improving efficiency.
The key advantage is cost savings. Out of the model's 550 billion parameters, only about 55 billion are activated to process each token. This yields 5-6 times higher throughput than comparable models and roughly 30% lower task costs. With a context window of 1 million tokens and a speed exceeding 300 tokens per second, Nemotron 3 Ultra becomes an ideal solution for long-lived autonomous agents and complex reasoning.
The "Ecosystem" Strategy: Free Cheese in a Mousetrap
The main value of the release is not the model itself, but the ecosystem NVIDIA is building around its hardware. Anyone running Nemotron is almost certainly doing so on NVIDIA graphics cards, fine-tuning it with its software tools, and deploying it on its software. Openness here is not charity, but a way to funnel developers back into purchasing the company's hardware.
NVIDIA can afford this because its financial capabilities are incomparable to the model's costs. With a market capitalization exceeding $5 trillion, training Nemotron 3 Ultra, which likely cost hundreds of millions of dollars, is a nearly negligible expense for the company. Graphics card sales more than cover the research, so NVIDIA can give the model away for free and still earn more than closed competitors charge for paid access.
The release gains additional weight from the political context. An open American model can be inspected, modified, and run on private servers — making it attractive for countries building independent national AI, from Europe to Southeast Asia. No one can remotely disable such a model, and this is especially valuable in light of recent restrictions surrounding closed models.
Lagging in Intelligence, but Winning in Reality
Despite all its merits, Nemotron 3 Ultra is not the smartest model on the market. In the independent Artificial Analysis Intelligence Index ranking, it scored 48 points — the best result among open-source US models, but trailing leaders like Kimi K2.6 (54 points) and DeepSeek. Open-source models, according to analysts, lag behind closed ones by three to seven months.
But this lag matters less and less if the open-source model is simply sufficient for real-world tasks. A bank deploying Nemotron 3 Ultra to process loans on its own servers doesn't need flagship-level intelligence — it needs a model that can be fine-tuned on private data, kept within its secure perimeter, and not share confidential information with outsiders.
Cryptalist Analysis: NVIDIA's bet on efficiency rather than benchmark records may prove more farsighted. With mass AI adoption, the operational cost of a model comes to the forefront. One that is almost as smart but five times cheaper wins in real-world deployment. NVIDIA has the resources, motivation, and distribution channels to release increasingly powerful open-source models faster than any other company. This is not charity — it is a brilliant business move that strengthens its monopoly at the hardware level.