That would not go well for nvidia. Why would they want to enter and compete in a market where everybody is losing money? And in so doing alienate the people that make them profitable?

They don't, not directly. That's why they've generally been winding down DGX Cloud. However, lots of folks dramatically underestimate their frontier models (Nemotron family), and they license those models (free) for embedding in MANY other, large tech companies' own products and platforms, which either directly or indirectly consume massive quantities of GPU time.

Nvidia is best known for selling huge volumes of GPUs to the hyperscalers & neoclouds, but I don't think lots of folks appreciate how many GPUs ISVs like Snowflake, Databricks, Teradata, etc consume, too, just by virtue of designing much of their internal products around CUDA & Nemotron.

If those customers end up profitable, it could be tempting for nVidia to vertically integrate.

I don't think it's as easy as others say, though.

Presumably Nvidia would have a significant advantage on hardware costs, and could run custom hardware that the rest of the market will never see