Rationale for Engaging in Military Sales | Interfaith Center on Corporate Responsibility

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<h4>Resolution Details</h4>
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<strong>Company:</strong>
<p>NVIDIA</p>
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<strong>Year:</strong>
<p>2026 </p>
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<strong>Issue Area:</strong>
<p>Human Rights & Worker Rights </p>
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<strong>Focus Area:</strong>
<p>AI / Artificial Intelligence, CAHRA / Conflict Zones, Military Contracts </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p><strong>RESOLVED</strong>: Shareholders request that NVIDIA publish a report, at reasonable<br>expense and excluding proprietary details, which provides a clear explanation of<br>the strategic rationale for engaging in military sales and contracts, including how<br>such activities are expected to contribute to long-term shareholder value despite<br>potential challenges such as lower margins, increased administrative complexity,<br>legal risks, and reputational risks.</p>
<p><strong>Supporting Statement:</strong><br>NVIDIA’s leadership in advanced computing technologies positions the company<br>as a supplier for a wide range of sectors, including defense and national security.<br>However, investors currently lack transparency into the company’s involvement in<br>military sales, contracts and investments and the strategic reasoning behind these<br>engagements. This lack of disclosure creates uncertainty about how such<br>activities align with NVIDIA’s long-term growth strategy, its reputational and legal<br>risk profile, and shareholder interests.<br><br>Government and military contracts are often associated with lower profit margins,<br>complex regulatory requirements, and bureaucratic processes that can increase<br>costs and operational risk.1 Unpredictable changes in export market rules and<br>regulations for sales to foreign governments also have been a source of unwanted<br>volatility in NVIDIA shares.2<br><br>Additionally, these relationships may expose the company to reputational risks,<br>particularly in regions where military activities are controversial or subject to<br>heightened scrutiny.<br><br>Existing international humanitarian law (IHL) obligations apply to the development<br>and use of AI-enabled military capabilities – and companies, corporate personnel,<br>and executives can be liable under IHL for providing assistance to those<br>committing abuses.3 Major defense contractors have been sued for allegedly<br>abetting war crimes.4<br><br>NVIDIA acknowledges in its annual report that if its products “draw controversy<br>due to their perceived or actual impact on society, such as AI solutions that have<br>unintended consequences…we may experience brand or reputational harm,<br>competitive harm or legal liability.”5<br><br>For these reasons, some investors view government contracting as a low-value<br>business segment.</p>
<p>Despite these challenges, NVIDIA continues to pursue military-related sales and<br>contracts. NVIDIA also has investments in numerous AI ventures with military<br>contracts. Shareholders deserve a clear explanation of why the company believes<br>these engagements are strategically important and how they contribute to longterm<br>shareholder value.<br><br>Without this information, investors cannot fully assess the risk-return profile of<br>NVIDIA’s military-related activities or evaluate whether these engagements align<br>with the company’s stated priorities.<br><br>By publishing a report that explains the strategic rationale for military sales and<br>contracts, NVIDIA will improve transparency, investor confidence, and<br>accountability, enabling shareholders to make informed decisions about the<br>company’s governance and long-term value creation.</p>
<p>1 https://csimarket.com/Industry/industry_Profitability_Ratios.php?ind=201<br>2 https://www.cnn.com/2025/04/16/tech/nvidia-plunge-h20-chip-china-export-intl-hnk<br>3 https://opiniojuris.org/2025/04/07/the-role-of-business-in-war-a-different-defense-to-corporatecomplicity-<br>part-i-the-old-offense/<br>4 https://armstradelitigationmonitor.org/case/civil-complaint-by-yemeni-nationals-to-seek-injunctive-reliefand-<br>damages/<br>5 https://s201.q4cdn.com/141608511/files/doc_financials/2025/annual/NVIDIA-2025-Annual-Report.pdf</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> Michael Connor</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Open MIC</span></div>
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