Nvidia is pulling off the most sophisticated financial loop in tech history. They invested $40 BILLION in its own customers in just 5 months. Here's why this could blow up the entire AI economy: Nvidia generated $97 billion in free cash flow last year. Instead of sitting on it,... Jensen started writing checks to every company in the AI supply chain. Not small checks. We're talking about billions at a time. And almost every single one of those companies turns around and spends that money on Nvidia chips. Follow the money: $30 billion into OpenAI. OpenAI is one of Nvidia's largest GPU customers and spends billions annually on Nvidia hardware through cloud providers. $2 billion into CoreWeave, a company that exists exclusively to rent out data centers full of Nvidia GPUs. $2 billion into Marvell for silicon photonics that connects Nvidia systems. $2 billion into Lumentum for optical tech that powers Nvidia data centers. $2 billion into Coherent for the same thing. $2 billion into Nebius, an AI cloud company deploying Nvidia infrastructure. $3.2 billion into Corning, the glassmaker building three new US factories specifically to make fiber optic cables for Nvidia's next-gen systems. $2.1 billion into IREN, a data center operator that just agreed to deploy 5 gigawatts of Nvidia-designed infrastructure. And the list goes on. Every single recipient either buys Nvidia chips directly, builds infrastructure that runs on Nvidia chips, or manufactures components that go inside Nvidia systems. Matthew Bryson, an analyst at Wedbush Securities, said in a research note that Nvidia's dealmaking fits "squarely into the circular investment theme." Bloomberg even published an entire interactive feature this week titled "AI Circular Deals: How Microsoft, OpenAI and Nvidia Keep Paying Each Other." The piece maps how capital flows between the same handful of companies and gets counted as revenue multiple times along the way. But here's the part that makes this genuinely complicated: Nvidia's $5 billion investment in Intel from September is now worth over $25 billion. That's a 5x return in months. Their private company portfolio went from $3.4 billion to $22.3 billion on the balance sheet in a single year. They booked $8.9 billion in gains from equity investments alone. So when critics say "circular investing," Nvidia can point to Intel and say "we turned $5 billion into $25 billion, this is just smart capital deployment." And they're not wrong. Some of these bets ARE paying off like crazy. The real question is whether Nvidia is a chipmaker that happens to invest, or a venture fund that happens to sell chips. Because right now Jensen is doing both at a scale that has never existed in the semiconductor industry. No chipmaker in history has EVER invested $40 billion in its own ecosystem in five months. Last fiscal year Nvidia invested $17.5 billion in private companies. Their SEC filing literally says those investments include "AI model companies that purchase its products directly or through cloud service providers." They're saying it themselves: We invest in companies that buy our products. On Nvidia's last earnings call, Jensen told investors their investments are focused on "expanding and deepening our ecosystem reach." Translate that from CEO-speak and it means " we're funding the companies that fund us. The bull case says Nvidia is building an unbreakable moat by financing the entire AI supply chain and ensuring it all runs on Nvidia hardware. The bear case says this is the most elaborate circular revenue scheme since the subprime mortgage era and it all breaks apart the moment one domino falls. Both cases use the exact same evidence.show more

the part most people miss: Nvidia isn't just selling GPUs. they're financing the entire AI infrastructure buildout. they invest in their customers (CoreWeave, Lambda, etc.), those customers buy more GPUs, Nvidia books the revenue, generates more cash, reinvests again. it's a flywheel with $97B in free cash flow powering it. but here's why it probably works: the end demand is real. every hyperscaler is spending $60-100B this year on AI infrastructure. sovereign nations are building their own compute. total global AI capex is heading toward $690B+. Nvidia found a way to accelerate demand for their own product by funding the buyers. genius or fragile depends on whether AI workloads keep growing. so far every quarter the demand curve gets steeper.

Everything Nvidia touched turned into gold. While NVDA is seriously undervalued with PEG ratio about 0.7-0.8 I dont know how long the market maker can keep suppressing, $300 $NVDA traded below $200 for 9+ month is just amazing.

Wild. That's how you fuel an entire ecosystem and build unstoppable momentum in AI. Distribution on another level.

Bears are wrong.

The subprime analogy is unfair: there is nothing subprime with the invested companies. I see more like an ecosystem acceleration path in a period where Nvidia stock was (undeservedly) plain. Granted, if AI doesn't deliver, the whole ecosystem will be considered a scam.

笑死了 有什么不对的吗？任人不唯亲？ 不投资自己的生态？难道投资自己的竞争对手？

People are so dumb. THIS is the bull case: *Alphabet and Amazon generated “other income” totaling $53 billion in Q1, or ~60% of their Q1 income. $49 billion was due to equity stakes in private companies. Nvidia and the others are going to win the next 20 years too BECAUSE of this

Nvidia funding its own customers is the textbook definition of vendor financing risk. The dot com era ended on similar circular revenue. Calling it a 'moat' before the unwind is wishful framing.

我的策略计划! $NVDA $SNDK $MU

This is an historic Moat .. AI thru 2035. NVDA goes to $350 easily …

The risks are high for this AI infrastructure built and $NVDA needs to ensure there’s no weak links between the ecosystem. If the revenue stream doesn’t continue to the big capex spenders, then the defaults may happen. The the house of cards collapse 🤔

@grok summary this to me as if was a ceo ; 10 bullet points and graphs ; whatever needs to be used to explain with detail

Listen to Dario Amadeis latest speeches and pod. Then you understand why. When the Datacenter users grow their revenue by 80x - that’s real demand. Jensen reinvests into this demand driven supply chain. As does Alphabet.

What Nvidia is doing is either genius capitalism or the early stages of a very dangerous feedback loop. Maybe both. The bullish interpretation is actually incredibly compelling: Jensen realized AI isn’t just about selling chips. It’s about controlling the entire ecosystem. If you finance the builders, the cloud providers, the networking companies and the infrastructure layer, you guarantee demand for your own hardware for years. It’s similar to what Standard Oil did with oil infrastructure or what Apple did with its closed ecosystem — except at AI scale. And to be fair, many of these investments are real businesses with exploding demand. Data centers, fiber optics, AI clouds and compute infrastructure ARE genuinely needed. AI is consuming power, networking and compute at historic levels. But the bear case is where things get uncomfortable. If Nvidia funds companies that then spend billions buying Nvidia hardware, revenue quality becomes harder to analyze. Capital starts circulating within the same ecosystem and can artificially amplify growth signals. That doesn’t automatically mean fraud or a bubble. But it DOES create reflexivity: Higher Nvidia stock → more capital → more investments → more Nvidia purchases → higher revenues → higher stock. As long as AI demand keeps growing exponentially, this machine looks unstoppable. The danger appears if AI spending slows, if model economics disappoint, or if one major domino fails. Suddenly the ecosystem becomes interconnected in reverse. The same loop that amplified growth can amplify contraction. What makes this historic is the scale. Nvidia is no longer acting like a normal semiconductor company. It’s becoming part chipmaker, part infrastructure bank, part venture capital empire and part geopolitical asset. And honestly? That may be exactly what the AI era requires.

"The piece maps how capital flows between the same handful of companies and gets counted as revenue multiple times along the way." It also gets counted as demand and that demand isn't organic from paying customers it's from the circular finance crew and that could end any day

@Stefano_Peron Solid.... if Nvidia just keep producing cash flows from 3rd party vustomers, it is derisking the tails of the curve

What I can see is that NVIDIA is financing the entire AI economy around its own hardware, and that’s the part most people are underestimating right now. The companies that are building AI models, AI clouds, data centers, networking, and infrastructure are all connected through NVIDIA’s money and chips at the same time. What makes this interesting to me is that both arguments are true. On one side, Jensen looks like he’s building one of the strongest long-term ecosystem strategies the tech world has ever seen. On the other side, it also creates a world where the entire AI wave depends on a small group of companies that trust, spend, and grow together, @Ric_RTP.

All poised to unwind. It’s akin to financing Escalades for the unemployed

So $NVDA invests 100B in open ai Open ai uses it to buy $100 b in chips NVDA book at 75% margins When any equity steal gets written day in say 28’ - we see non operating other and gets little coverage Same dollar but dif line items / dif multiples. This isn’t just vendor financing with better optics ?

funny how every moat starts looking like a feedback loop at this scale

They haven’t invested in IREN? Miss information. They have the opportunity, but haven’t yet

NVidia is so smart. Incredible.

People compare Nvidia to Cisco, Intel, or even Standard Oil. But this structure looks closer to SoftBank fused with TSMC. A chip company using its balance sheet to accelerate ecosystem dependency while simultaneously monetizing every layer of the stack built around it.

Market share investing

Investing in your own customers and calling it ecosystem development is either genius or the biggest house of cards in tech history, probably both

Here’s how that domino falls

@grok

This 40 billion yuan has tied the entire AI supply chain to itself. Currently, the world's top AI companies, optical module manufacturers, and data centers all rely on his checks for survival. Huang isn't betting on the future of AI; he's betting on...

isn't this similar to vertical integration?

They put it in their own SEC filing and nobody blinked, that level of confidence is either visionary or terrifying

It’s what makes the economy work, I know it’s strange, but they trade money back-and-forth so to speak it creates income or investment which gives power and growth to the companies

This makes sense when you consider inference time. Agents do not just predict the next token; they reason through loops. 1000x more compute is the price of moving from "chat" to "do." 🚀🚀🚀🌙🌙🌙

Google did it at scale first. Their venture returns are probably the best in the business