NVIDIA CORPORATION | Rationale for Engaging in Military Sales at NVIDIA CORPORATION

Status
Omitted
Previous AGM date
Resolution details
Company ticker
NVDA
Lead filer
Open MIC (Open Media and Information Companies Initiative)
Resolution ask
Report on or disclose
ESG theme
  • Social
  • Governance
ESG sub-theme
  • Corporate purpose
  • Conflict and/or violence
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Technology
Company HQ country
United States
Resolved clause
Resolved: Shareholders request that NVIDIA publish a report, at reasonable expense and excluding proprietary details, which provides a clear explanation of the strategic rationale for engaging in military sales and contracts, including how such activities are expected to contribute to long-term shareholder value despite potential challenges such as lower margins, increased administrative complexity, legal risks, and reputational risks.
Supporting statement
NVIDIA?s leadership in advanced computing technologies positions the company as a supplier for a wide range of sectors, including defense and national security. However, investors currently lack transparency into the company?s involvement in military sales, contracts and investments and the strategic reasoning behind these engagements. This lack of disclosure creates uncertainty about how such activities align with NVIDIA?s long-term growth strategy, its reputational and legal risk profile, and shareholder interests. Government and military contracts are often associated with lower profit margins, complex regulatory requirements, and bureaucratic processes that can increase costs and operational risk.1 Unpredictable changes in export market rules and regulations for sales to foreign governments also have been a source of unwanted volatility in NVIDIA shares.2 Additionally, these relationships may expose the company to reputational risks, particularly in regions where military activities are controversial or subject to heightened scrutiny. Existing international humanitarian law (IHL) obligations apply to the development and use of AI-enabled military capabilities ? and companies, corporate personnel, and executives can be liable under IHL for providing assistance to those committing abuses.3 Major defense contractors have been sued for allegedly abetting war crimes.4 NVIDIA acknowledges in its annual report that if its products ?draw controversy due to their perceived or actual impact on society, such as AI solutions that have unintended consequences?we may experience brand or reputational harm, competitive harm or legal liability.?5 For these reasons, some investors view government contracting as a low-value business segment. Despite these challenges, NVIDIA continues to pursue military-related sales and contracts. NVIDIA also has investments in numerous AI ventures with military contracts. Shareholders deserve a clear explanation of why the company believes these engagements are strategically important and how they contribute to longterm shareholder value. Without this information, investors cannot fully assess the risk-return profile of NVIDIA?s military-related activities or evaluate whether these engagements align with the company?s stated priorities. By publishing a report that explains the strategic rationale for military sales and contracts, NVIDIA will improve transparency, investor confidence, and accountability, enabling shareholders to make informed decisions about the company?s governance and long-term value creation. 1 https://csimarket.com/Industry/industry_Profitability_Ratios.php?ind=201 2 https://www.cnn.com/2025/04/16/tech/nvidia-plunge-h20-chip-china-export-intl-hnk 3 https://opiniojuris.org/2025/04/07/the-role-of-business-in-war-a-different-defense-to-corporatecomplicity- part-i-the-old-offense/ 4 https://armstradelitigationmonitor.org/case/civil-complaint-by-yemeni-nationals-to-seek-injunctive-reliefand- damages/ 5 https://s201.q4cdn.com/141608511/files/doc_financials/2025/annual/NVIDIA-2025-Annual-Report.pdf

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.