40 year old gamer here having a flashback of all anti- competition practices Nvidia sustained for decades. Who here remembers GameWorks and PhysX effectively sabotaging multi-vendor optimization in titles like Witcher 3 and Watch Dogs? Expensive Gsync monitors? Trying to force OEMs to be GeForce partners in exchange for full GPU support? Forcing EVGA exit from the market? And then completely shafting gamers when crypto and AI markets opened up?
I also had the displeasure to work with nvidia. After years of pushing gaming cards on us for compute, the years I spent working with nvidia was full of conversations where they would list silly excuse after excuse as to why we should use the expensive enterprise-grade cards instead. All the while, we begged them to unlock driver features that were available to Quadro cards but not GeForce cards, features as simple as hardware acceleration pass-through on a remote desktop connection. It took them a full-on epidemic, where remote work became super common, to allow some of those features to GeForce cards.
So it's really on brand that they tried creating a fake scarcity to keep their prices up. I don't envy the situation Jensen is in but I won't be sorry for him.
Thanks for sharing the video. What's funny is that YouTube tagged a 10 year old video as AI-generated. Google is another company that's fallen hard from grace.
Not defending NVIDIA by any stretch, but I think Intel is the only one that allows ‘enterprise’ features on their consumer cards, like SR-IOV.
Such a complete failure of the market that NVIDIA hasn’t had any real competition. All of the vendors abandoned PC gamers though. Though the price choke point is memory, not cores.
Which makes me curious, if AMD did another HBM-based card like the Vega series, would that RAM be cheaper now than GDDR?
many have asked why AMD doesn't make its GPUs cheaper.
lisa su and jensen huang not competing with each other on price and being related is as much of a coincidence as wuhan having a virology institute experimenting on COVID-19 and being the center of the COVID-19 outbreak
Well - the situation with his wife or being unable to control his Jenwong or whatever one would call it, is still a private matter (the allegation of the spy situation is a bit more complex, but the other affair he had going, or at the least one, losing track here of his personal love life), is at the end of the day not really something that is or should be in the spotline for others, even though it has already generated tons of meme videos. People are very happily putting memes about the ex CEO right now - he is probably one of the top #3 meme people right now. The other day I saw where he approached two female podcasters; it suddenly had such a creepy vibe, given his weakness for females ... (though that was not a meme as such, just some seemingly accidental Jensen sneakily creeping in situation ... can't stop him zooming in on the ladies, apparently)
But customers having to pay more due to NVIDIA milking them - now that's something that really would require mandatory jail time for all NVIDIA folks involved here, IF true and verified in court (right now we can only speculate, even if we have extremely convincing proof; the courts would have to come to such a conclusion at the end of the day; and for this, the court systems have to work. I have severe doubts the courts work in the USA right now. It seems a billionaires-controlled court. Why is the whole Epstein network not investigated? Why is only Ghislaine in jail? A single person master-minded +5000 sex slaves over some 20 years or so? How is that even logistically possible?).
As another almost 40 year old gamer, I find myself wondering why nobody else ever brings up 3dfx when discussing Nvidia. I've been salty with them since the buyout.
There was an article on here just a few days ago about an Nvidia crypto GPU that was sold a few years ago. This lady discovered that via voltage glitches she could turn back on features that Nvidia had turned off. She had cards that were sold with only 8 gigs of VRAM enabled that actually had 80 gigs of VRAM.
selective binning of semiconductors is not a new or inherently evil practice. that being said, someone managing to get a 170hx to 80 gigs is possibly the most prominent example of unlocking manufacturer restricted features.
NVIDIA has been terrible to countless groups over the years(even more than you listed). They survived by being really good. You know who else have been jerks? Every other leading successful tech company (NVIDIA is nothing compared to Microsoft's misdeeds for example). Microsoft still going after 51 years. And now a new generation having never remembered the browser wars have fully embraced Microsoft products like VSCode. Your trip down memory lane reminded me about the numerous 'gamer boycotts' that all failed. There used to be a meme about how people signing a pledge boycotting a title would then be seen 'online' on Steam playing said game. At the end of the day most consumers didn't care. They wanted the best products and NVIDIA more often than not delivered. A company that is super polite to all their customers and partners is a company that will still be dropped the second their products stop delivering the value that customers expect.
True. As much as we hate on companies like Microsoft and Nividia, or people like Bill Gates and Elon Musk, it has to be acknowledged that above a certain level, it's a eat-or-be-eaten world, and I'll never reach that level.
>We should celebrate their fall, maybe there will be room for some real competition.
How are you going to get more competition when the entry cost is so high? The only competition will be the Chinese willing to dump endless cash into this but they are not doing it out of the goodness of their hearts either and it will still take years. If NVIDIA starts to falter then in the short term things will get even more painful for consumers as AMD becomes the new crummy company people love to hate.
I always thought that Nvidia's presence in the Khronos Group was a farce. On one hand they were vendor-locking as much as possible at the expense of the industry, and on the other they were "contributing" to the open languages and protocols.
Dirty secret of "open" source: it's a strategic collaboration between big vendors. It's very rarely someone's hobby project. Almost all Linux changes come from hardware vendors.
When a bubble pops, the pop typically takes years to happen. It's more of a slow deflation in most cases. Afterwards, you can easily spot the peak that would never be reached again but, during a "pop", it's not clear if you're past that peak or if you're just experiencing a momentary blip on the path to new highs.
Nvidia is likely not going to surge back to $240 soon. It might go lower actually. Skeletons are still falling out of closets. Huang may have been the tech founder's tech founder, but he kept some pretty nasty company in recent years and, as we're now finding out, got both himself and his company into shady territory. As it turns out, ethics are not just for aesthetics.
Is Nvidia slowing down for a year or two bad for AI as a technology? Probably not. Nvidia could find a leader that will return them to top form, or another company could take advantage of the situation to catch up and surge past. A lot of AI researchers have been calling for a pause or, at the very least, a slow-down. This might be just what was needed.
However, given Nvidia's utterly unique position as both hardware supplier and bank for the data centre build-out, what will the impact be on the rest of the AI sector? The market is going to have to price in a weaker and slower build-out as well as a loss of trust in Nvidia. That's clear downwards pressure. Is it a blip, or are we now past the peak?
It’s not the only indication that we are past the peak, I think. OpenAI’s failure to raise what they wanted, Anthropic’s likely junk rating, banks struggling to offload AI debt at fairly deep discounts, Oracle’s obvious problems, the strength of open weights and open source, a loss of confidence in Coreweave etc.
As you say, if Nvidia is chastened enough to slow its banking endeavours and that lets air out of the bubble in a progressive rather than dramatic way, that’s probably better for everyone (except OpenAI, who are probably hosed in that scenario, as they have huge commitments but are struggling to raise what they need; Anthropic might last long enough to reassess)
GPU scarcity is a really poor proxy for the health of the AI market. I don’t know if I should be surprised that someone so bullish about it doesn’t understand this.
Did you read the OP? Because Nvidia gave money to people who aren't you, so those people could give the money back to Nvidia for GPUs. In other words they gave away all of their GPUs in exchange for stakes in startups, because they were betting that VC hype and the perception of high demand generated from doing so would be worth more than selling GPUs normally.
Does the math check out, though? For reference, Nvidia added $17B of non-marketable securities in 2025, and its total revenue was $215B. So, assuming all these equity investments went to GPU purchases, they only amount to 8% of its annual revenue.
Since these firms (neoclouds and AI startups) will get consolidated if Nvidia puts too much money into them, I assume the majority of their funds are coming from elsewhere.
> Corporate development-led AI equity investments alone exceeded $40 billion in just the first four months of 2026
The accusation in the headline is that this activity contributed to the general shortage of GPUs which would, if true, increase their pricing power and profit margins even on chips sold to other customers. So I don't think it's a direct comparison to their equity deals.
Is this the only reason Nvidia made money? No, obviously. But is it adding fuel to the fire? If there is a bubble will this make the fallout worse? Seems likely.
More importantly this suggests a second plausible reason the board might have wanted to wrest control of the company away from him. (The other hypothetical one being that he was doing illegal stuff.)
According to Gemini, Nvidia added $43 billion in direct equity stakes,$36 billion in AI compute partnerships, and $100+ billion in loan lease guarantees, which works out to $63 billion this year, $20 billion for the next 3 years, and $10 billion for the last 6 years based on it's assumptions.
So about a third, a sixth, and a twelth of their annual revenue respectively.
I think the larger concern is that both the revenue and assets/agreements depend on Nvidia maintaining sales, market share, and their share of capacity at TSMC/etc... If they run into trouble on any of those fronts, their revenue and assets could take hits from multiple directions.
Just like we knew for at least a year already about the sales through Singapore. A lot of people called it for what it is at the time already (see for example: https://www.ft.com/content/6b1ce190-24d4-4f39-a518-ef9dae5fa...).
And yet, things unrolled very slowly, then suddenly.
My theory is that once new CEO is found, especially if he comes from the outside, he will be highly incentivized to denounce past sins and disclose as much as possible to start with a clean sheet. I would bet that this is one of the main reasons the stock is tanking. House of cards is about to collapse, and that may be the trigger.
We did but people simply keep pretending it’s not happening.
Between the circular financing and behaviour some analysts call “channel-stuffing”, it does seem that with Jensen Huang gone, the music is perhaps about to stop.
No one seriously denies the actual activity was happening, they just dispute its implications, and for good reason. Vendors frequently extend financing with the hope of making more sales, the most obvious example being auto loans and BNPL
Vendor financing is already a sign of an unhealthy market. When widespread, almost always. If the only easy way you can borrow enough to buy a thing is from the vendor, that’s bad. And if vendor financing is an increasing, not decreasing, proportion of the finance in a market, that’s worse.
Channel-stuffing, if it is happening, is usually plain illegal.
The implications are obvious: if people are using GPU scarcity and prices as a proxy for AI demand (and they absolutely have and still are, at every level), and use it as an indication that they must secure GPUs while they can, then it matters a lot if in fact that demand is being padded out and front-loaded in various ways.
Yes, but also, vendors are best positioned and most incentivized to be the lenders for their customers. They often just provide unbeatable terms compared to all options, even better than cash for those who do have that option and ability.
A financing company usually is fully taking the credit risk. They have to charge a high interest and hope their underwriting process is sound. That is generally the only way they make money from the transaction.
A vendor can give 0% interest or even a discount to financing customers because they are protected by the profit margin of the transaction. They can also have a looser underwriting process and take more credit risks while doing so.
>Vendor financing is already a sign of an unhealthy market. When widespread, almost always. If the only easy way you can borrow enough to buy a thing is from the vendor, that’s bad. And if vendor financing is an increasing, not decreasing, proportion of the finance in a market, that’s worse.
Almost none. Dealerships will arrange financing for you, but the actual financing comes from a third party financial institution. The dealership walks away from the deal with the full cash value of the sale; and maybe a kickback from the bank.
The concerning thing with vendor financing is that the vendor is supposed to be in the widget business, not the financing business. If they are getting into the financing bussiness, that is generally a sign that the professional financers don't want to get involved; which is not a good sign.
You're being deliberately obtuse. Every auto manufacturer has a captive finance arm. That captive finance arm may be operated by a financial institution, but the financing is subvented by the auto manufacturer. Chase isn't offering 0% financing on a Subaru because they like the car, they're offering it because Subaru pays them to.
This is, nevertheless, a quite different story. Nvidia does not have a captive finance company.
The concern has to be that ordinary financial institutions might not make such loans to startups, and that therefore Nvidia is using vendor finance to create sales that otherwise would not happen.
Rather than the auto loan system, where essentially the front face of an entire finance industry has moved into the dealerships but you can still get a car loan outside it.
Right but aren’t you kind of underscoring the point? It’s not really the kind of vendor finance we are talking about then; it’s really just the finance industry moving into loaning other things, moving the storefront into another business. It’s pretty highly regulated.
Vendor finance of the kind Nvidia is doing is different: they are the single vendor for one thing, they are loaning to startups who otherwise might not get funding from banks, it’s coming from the same balance sheet as the product, and these loans are materially causing GPU scarcity.
In general, vendor finance of the kind Nvidia is doing is indicative of an uncertain market, and when it’s the only vendor and it causes the price of the thing to rise, that’s obviously bad.
The industry is very aware that it relies on this for its continuing growth and stability.
I don’t know, because I am in the UK and I don’t know exactly what definition of vendor finance you’re working with.
For example, here in the UK, that is extremely regulated, and you’re usually not buying with the dealer’s money, or the dealer chain’s money. Sometimes you are buying with the manufacturer’s money (through a regulated subsidiary finance company or joint venture) but most of the time you’re simply buying with money from a regulated finance company, from which the dealer is getting an introducer’s fee (and for which they must agree to be regulated).
(I am not a driver and have no car loans but I am reasonably familiar with the business model from previous client business)
It is my understanding that Nvidia is pretty directly using their own money for this: there is a criticism that they are essentially “selling their balance sheet as a service”, and that their total exposure is about $200 billion.
Nvidia’s loans are not, in that sense, particularly comparable to even the loosest definition of auto loans. Not least because there’s no competition for the products.
This is all putting aside how much money Jensen Huang has persuaded others to loan. Perhaps that side of things won’t go away; I think we might see him carrying on that function in some future capacity. But it will almost inevitably be at a much smaller scale, because the market is significantly less enthusiastic about lending more money.
it's also an issue for cat companies. they get a double whammy during economic downturn because demand drops and supply rises (due to repossessed data flooding the market)
Why is Nvidia financing neoclouds to buy Nvidia chips to rent to AI customers instead of owning the DCs themselves? At least it was my understanding that run their own DCs for GeForce Now for example
You might as well ask why they don't just keep all their GPUs and compete directly with Anthropic and OpenAI to make frontier models. The answer is the same, Nvidia's core competency is hardware and although they dabble up the stack they would rather stay focused on the GPU business. It also provides a degree of separation where they can bet on many different neoclouds and AI businesses, and some may fail but there will be survivors and winners.
I didn't know that, I thought it was just financing deals as I never looked closely into it. It looks like the ownership is lowish in both though (from what I can fine)
I just am unable to understand whether it's a bad thing or not, you could frame it as being circular, but you could also see it as Nvidia simply giving hardware in exchange for startup equity, is that really fundamentally problematic, is it the scale at which it was done, or is it a valid but risky tactic?
The scale is the largest factor, I think. If vendor financing is happening in a mature multi-vendor market on a small enough scale as to not constrain supply, it’s a less unhealthy situation than when there is only one vendor.
Nvidia wants to ensure data center companies that are optimized for AI like Nebius stock their buildings with Nvidia chips instead of AMD or ASICs so of course it is smart business sense to partner with them or take stakes in them.
Nvidia gives Nebius first access to their newest chips, ensures they get deployed at top performance, allows Nvidia to recognize the revenue upfront, and ends up owning equity in the upside.
Nebius gets the best chips first, gets cheaper financing due to the obvious security granted by having one of the most valuable companies in the world standing behind them, etc.
It sounds like a mutually beneficial deal rather than something shady to me.
By the way they report demand is 10x supply so I think everyone in here hoping for some cheap GPUs soon is kidding themselves. Eventually RAM might get cheaper because it's easier to build new factories to produce commoditized RAM but TSMC is the bottleneck for advanced chips and it isn't resolving anytime in the foreseeable future.
As a result they never seriously pursued frontier research for open models - which could have easily absorbed any excess compute they planned for.
On the other side their customers are rapidly becoming their competitors and will happily eat up spare capacity at TSMC if nvidia can’t fulfill its obligations.
Edit: to be fair there are several counterfactuals that could have played out negatively if nvidia decided to go into frontier research or go upstream like Elon and build their own fab. Jensen himself said they were completely focused on building general purpose compute and his bets had turned out to be right so far.
To be fair their Nemotron models are pretty good. The Parakeet speech-to-text model is also pretty good. That being said these pale in comparison to the frontier labs. They should've invested more into it, but I understand that they don't want to piss off their biggest competitors.
A friend of mine works on Nemotron. He stated quite plainly that they intentionally don't push the boundaries for the reason you state. It's similar to when companies create reference designs that show off the features of their real product, like Google and their Pixel phones
"The reason behind this was to maintain the perception of ongoing high demand and to move an oversupply of semiconductors from TSMC."
Huh. The circular financing was figured out a while back, but this is something I had not seen before.
This could all work out. NVidia stock drops. AI company stock drops. The more efficient approaches to inference and more open models take over for most mid-level applications. The need for insane numbers of data centers is reduced. AI works fine and costs less.
It is completely normal and expected for large companies to invest in others who can use and grow the use of their products. It’s equivalent to a microscope manufacturer investing in a microbiology company.
Here’s a quote about Henry Singleton, one of the most successful ever:
“CEOs need to do two things well to be successful, run their operations efficiently and deploy the cash generated by those operations.
Most CEOs focus on managing operations. Singleton, in contrast, gave most of his attention to the later task. As Warren Buffett observed, very few CEOs come prepared for this critical task of capital allocation.”
I don't care for Nvidia, witness all my PCs using AMD cards for ages and never wanting to buy their stock because some of their practices I disliked.
But I think this is at least to a degree tinted hindsight - it generally makes some sense to have an interest in funding customers who might grow to be even bigger customers. And it's been totally public for ages.
I have no investment in Nvidia and have no reason to like them or hate them.
But I think this is backwards. I remember 4-5 years ago waiting for AWS and GCP to schedule us an 8GPU machine (gcp had 16 even) for hours while paying them crazy rents for the GPUs that paid the hardware in 2 months of usage. This while components and servers were actually cheap.
The hyperscalers are monopolies that eventually some admin will grow balls and will have to break up. But this is wishful thinking and nVidia didn't do a bad job working them around. Now with other monopolies drying out components like RAM from the market, one can actually rent GPUs with less effort from neoclouds.
It doesn't seem like anyone's going to be breaking up any monopolies in the US anymore in the near future, if ever, excepting some really massive sociopolitical shifts.
I live in Switzerland and I am not directly invested. But the Swiss national bank owns many us stocks. Pretty sure we are all somewhat connected to nVidia.
While I generally dislike scaling consumer finance up to larger markets, to go with your analogy.
Isn't the "credit" that Nvidia extended secured by the value of the GPUs and Datacenters the creditors end up buying/building? If so then should the value of those things suddenly plummet Nvidia is left holding billions in junk debt?
Yes like iterate appeals to neutrality by people with inherent skin in the game
People who are inherently biased to select themselves, thus upending any rhetorical appeals they are capable of the mythical perfect neutrality they appeal to via generalized words
People don't have to be neutral. Neutrality between good and bad is mediocre. If you disagree with them make an argument, don't just lament the end of enlightened centrism.
Worse, I think companies that warehouse gpu's will buy newer more efficient gpu's by the time they get their data centers running but won't resell the older but unused gpu's afraid to let their competitors to make inference.
Isn't that straightforwardly explained by typical hoarding behavior, not " afraid to let their competitors to make inference"? During the pandemic people were hoarding TP that they couldn't possibly use within a reasonable amount of time, but it'd be crazy to accuse people of doing that because they were afraid of their neighbors having clean asses.
"Nvidia has been one of the worst trouble spots we’ve had with hardware manufacturers. And that’s really sad because Nvidia tries to sell chips – a lot of chips – into the Android market. And Nvidia has been the single worst company we’ve ever dealt with! So Nvidia, fuck you!”
—Linus Trovalds, June 2012
Even if NVidia crashed and there ends up being an oversupply of GPUs or TSMC fab slots, this doesn't change that OpenAi and Google still need memory for their own hardware accelerators, so the price of boards wouldn't go down by much
Part of me wonders (maybe naively) if with falling cost of AI inference and improvement of models means there is an oversupply of inference infrastructure. since we may reach a point where no one needs more and everything you could want can be done by the machine and adding more compute for most users is not any kind of benefit (like it was before LLMs there was an obvious ceiling where the majority of people did not need more compute).
I know Jevons paradox is a thing and I could see it going the other way as well but the first possibility seems to be ignored and I am not sure we can. Eventually demand for training might dry up as well if are models become largely very good and only a bit of fine tuning is required for most applications.
I don't see how it helps to think so narrowly about the computation needed solely for training when we are clearly headed to a future where tons of realtime applications (think robots) need to do insane amounts of processing ASAP while doing time-sensitive tasks.
IMO its copium to think that chips which have 10x more demand than supply are suddenly going to be easy to get as "AI is eating the world" like software did over the past decades.
You are definitely right, mrgordon - this isn't an infinite scaling, "one extra copy cost essentially nothing," software issue. Video cards are physical. You can't just sell more copies with almost zero marginal cost like software. Each video card is a physical good that is subjected to all those physical laws.
The author is a developer working on software that scales to 1,024 cores and greater -- which is within spitting distance now thanks to 256-core AMD EPYC processors. If you count hyperthreads as a "virtual core" then a dual-socket system gets you there!
That blog made me realise that almost all software can't utilise 1,024 cores, not even close! Microsoft SQL Server, as a random example, tops out at 64 cores for any single query.
Similarly, people couldn't utilise a machine that big, not with pre-AI software, except for certain embarrassingly parallel codes such as simulations and 3D graphics rendering.
Now... NOW... there's no upper limit. None. One person(!) can cheerfully utilise millions of cores, billions even, and there's no end in sight.
If you think one conversation thread in "ChatGPT" is all we need, you're not seeing the big picture of what's possible here.
Those math proofs OpenAI produced were created with tens of thousands of agents running in parallel, orchestrated by thousands more agents, and overseen by hundreds of agents, all triggered by someone typing as little as a sentence or two to start that avalanche of compute!
With that kind of AI power at your fingertips, huge, unthinkable projects become a fun exercise for the weekend:
- Translate the entirety of Wikipedia to every human language.
- Rewrite the entire Linux kernel to Rust in one go
Same. I replaced the pads and paste on my now ancient RX 580 in the hopes of surviving to the next time prices are affordable.
For anyone wanting to do so - you can! You have to make sure you nail the pad thickness though. That can be tough because it can have changed between revisions of the same card. Thankfully, AI is pretty good at combing through past data to figure out what you need. Also it voids your warranty.
Forgive me, but I feel the take you describe is part of the broader problem we are experiencing now.
<edit> oh god, I just re-read my response and face-palmed at me. I'm trying to think of how to express what I mean. Here's the shitty version: Dude says "this article doesn't really show any evidence - is just impression." You say, effectively, " do you have any evidence that they don't have evidence?"
Not the greatest of retorts, but I feel compelled to let it stand. I hope you get a little bit of what I mean.
What happens to neoclouds when the bubble pops. nvidia stops circular financing, and all of a sudden they can’t pay their debt. This leads to the DCs getting bought cheaply by hyperscalers and you have a monopolistic AI market with google/fb/amazon and likes are running the show again.
I feel there's just enough value behind the crazy proposition that there won't really ever be a classic .com bubble pop. That's the thing: there actually is a lot of value in this tech. May some of the current big players crash and burn? Sure. But the tech is undeniably powerful - things will, and are, changing.
Sorry deaux, but I can't quite understand your response - you're using a "I disagree with you" format, but it sounds like you agree with me! Can you clarify a bit?
Many HNers didn’t know and are now speaking in hindsight. (They love doing that to appear smart) Otherwise they would have shown the receipts about it years ago.
Nvidia did a great job at engineering a central bank-style AI funding bubble for as long as possible. Unfortunately, Cisco did the exact same thing.
Before, there was denial about the circular financing bubble, now look at them believing that a crash is coming.
The article from WSJ that this article is based on tells a completely different story. That it was Jensen himself who was considering pulling out from supporting smaller players because the shortage was forcing bigger ones to look for alternatives to Nvidia.
The conclusion it was doing this to create artificial scarcity is made by the linked article, based on, well nothing. It might be correct, but it's not what the referenced article says.
Surely this is Nvidia deploying excess capital by acquiring equity in high growth companies at significant discounts (factor in that a major portion of the investment comes back to them against their high margin products). This isn't a new business concept and is generally accepted as smart business? Not some breaking news conspiracy?
From WSJ below. Seems clear they went too far. But not clear Kress can navigate this.
Over the course of the meeting, he proceeded to tear into the woman who is now taking over for him as Nvidia CEO.
Colette Kress was "a deer in the headlights," he said, interrupting her presentation, according to a person familiar with the comments.
He had summoned Kress and his senior finance team to diagnose a ballooning problem: Nvidia was in talks to provide billions of dollars of guarantees to companies that couldn't afford its chips. That included deals led by Huang's son-in-law, Nico Caprez, who had been offering upstart cloud providers and data-center developers financing in the hopes of turning them into long-term customers.
Huang had launched a dealmaking spree and was now starting to question whether it had gone too far, according to people familiar with the matter.
Kress was a "reporting CFO," not someone who could help him define a strategy or make decisions, Huang said during the August meeting.
You’ve now edited the comment I replied to (originally it was just the quote), but it is still not responsive to the OP; nor is your new comment responsive to my earlier criticism.
Well that's actually a hopeful sign for the future. I was a bit worried hearing she'd been conservative about investments in the past... but if the conservatism was about vaguely fraudulent circular financing deals we'll all be better off.
> (factor in that a major portion of the investment comes back to them against their high margin products)
One problem is that there isn't one number that indicates what percentage of Nvidia's equity investments come back to it in the form of chip purchases. In some cases, it appears it's 100%; in others, it has been suggested that every $1 invested produces >$3 in revenue. $1 invested for $1 in revenue versus $1 invested for $3 in revenue are really different outcomes.
There are also the questions of the revenue and revenue quality of the companies Nvidia has invested in, how much debt they've taken on, what sort of backstops/guarantees Nvidia has given them, etc.
> One problem is that there isn't one number that indicates what percentage of Nvidia's equity investments come back to it in the form of chip purchases.
And why couldn't a single number be calculated for this? They know their portfolio companies, their investment amounts, and the portfolio company purchases of their products.
> There are also the questions of the revenue and revenue quality of the companies Nvidia has invested in, how much debt they've taken on, what sort of backstops/guarantees Nvidia has given them, etc.
These are generally good things to look at for all corporate investments.
The main takeaway is that Nvidia investing in their own customers isn't inherently a bad thing. Investing in a poorly performing company is a bad thing.
If true then I think it is time to put all responsible folks at NVIDIA
in jail. This is collusion to the maximum, if it can be proven in court.
I don't think they should be able to just pay a fine - there has to be
mandatory jail time for people who build a cartel. Even in the USA a
cartel should be forbidden - capitalism as the main religion in the
USA, mandates that free market competition leads to lower prices. This
clearly can not work if big corporations decide to milk the market. These
things have increased insanely when the orange king and his cronies seized power.
BigAI has also been artificially boosting demand for and perception of acceptance by paying for lots of shills in socmedia. astroturfing. I can even think of 3 multi-$MM rewards made in the space to pro-AI boosters (OpenClaw guy, Bun guy, Omarchy/DHH). arguably a 4th if count Linus too, via the Linux Foundation sponsorship
Well how else could OpenAI who is basically synonymous with AI to laymen have spent nearly $6B in 2025 on marketing? 7 out of 10 YT videos I watch are also sponsored by some random AI company, which to me is just insane: how does every AI startup have unlimited funds?
In what worlds would Nvidia not invest in adjacent startups?
In what worlds would these startups not be encouraged/obligated to use their investors hardware?
I mean, preventing bubbles is literally the reason short sellers are allowed to exist. When they see a stock that is overpriced, they help it correct. Innocent people lost a lot of money on Enron.
What scares me is that anybody could believe this garbage. It costs me $1 to make, I sell it for $5. Good deal! In fact, such a fabulous deal, I'm going to do this: Make 2 for $2, sell one for $5, then loan these other dudes the $3 I made in profit plus go $2 in the whole for a total of $5 so that they can give me the $5 back.
The more often you do it, and the greater the margin becomes due to squeeze, the dumber it is.
What you see is liquidity demands outpacing the system's ability to supply, and this his how industry partners in the chain keep the cause spiraling upwards.
So the CEO 'laid into' the CFO but sounds like she didn't push back all that hard. Seems like something leaked by Kress to make her seem clean, but just makes her seem dirty and weak.
If this is truly a problem, it's her job to say no to the CEO. They need to clean house at the top and hire someone like Johny Srouji to right the ship.
Guys, I have to say: I feel like I've found today's two-minute hate thread.
Has Nvidia done sketchy shit in the past (and very recent past)? Zero argument.
But as I follow this thread, I am seeing more and more pile-on that blames Nvidia for an increasingly staggering series of things that is starting to get out there.
Sorry, ramshanke - there really is a lot of promise to this tech. Will some of the current big payers collapse int he process? Definitely could happen. But there's no way around it: there's a lot of value in this new tech, and it's here to stay.
Been saying for years that we’ll be seeing a wave of bargain-priced GPUs, memory and hard drives before long. Maybe they can turn these data centers into Amazon distribution centers or apartments.
Sorry to see you get downvotes, xvxvx, for an honest (but I feel very incorrect) take, but I understand their impetus: there is a lot of value and power in this crazy new tech. Some companies may bite it, but the cat is out of the bag - in some form or another, the new AI technology is powerful and it isn't going anywhere - and we are already seeing the significant value it provides.
Depends, you buy a used server off of eBay or 3d print your own fan shroud. Waiting for prices to drop some and then I’m looking to build my own rack in the basement, so I can use open weight models and not directly support horrible data center practices.
Not for gaming they don't have monitor outputs and most of them aren't even in a standard PCI-E format. Some of them might be useful as a home AI accelerator with adapters and jerry rigged cooling.
Some of them, sure. You can invest in a server mb, and put a rack in your shed or basement. If someone was selling B100 like that, I'd happily buy a few for 15k. I somehow doubt its going to happen though.
I am not sure how inference constrained we are, btw. As an enterprise customer, I have zero problems with 429s and capacity from google or aws. All large volume inference jobs - so customer journey bots that help our company make money - run on dirt cheap models kept on short leashes in custom harnesses. Message delivery costs us 10x more than inference (with meta price hikes of October). All long-horizon jobs such as coding are probably somewhat inference constrained, but only to the point that sometimes the devs and corporate users with their own agents wait a bit for something to be completed, but nobody is noticing it. Sure, one notices a difference between /fast mode and normal while building software, but nobody really has a reason to care much, /fast modes are a pure luxury thing outside of incident remediation. I don't see what would Anthropic actually do if they had 10x the compute or 100x the compute they are planning for. Surely, some new business models, trolling mathematicians at a larger scale maybe?
This is delusional. The startups needed GPUs and nvda had the ones for AI. How is it even engineered they weren't forcing them to buy peanuts they didn't need but something they needed.
I wonder if I’m noticing the odd timing of everything too much, or whether there’s an effort to air as much of Nvidia’s dirty laundry as possible.
No idea to what end, Nvidia stock collapsing would probably be enough to bring on the AI crash with no hope of gradual rebalancing (like the drop we saw a week ago) and most likely take the US economy with it.
It’s not like anyone will get cheap RAM suddenly if that happens, more like lots of people will lose their livelihoods.
A product I work on had a big and quite public bug bounty payout recently. That led to an upswing in bug bounties reports. That's not odd timing, that's independent (human) agents sensing something as being valuable of their time poking at it.
I dunno, Nvidia's dirty laundry (dude's inability to keep his whatsit in his pants) seems like exactly the kind of thing that is inevitable to come out (oh god, that pun wasn't intentional).
No need for conspiracy here, personal weakness does in so many high flyers.
But I agree that the tech cat is out of the tech bag, and there's no going back: Nvidia doesn't make their own chips, they are almost fully reliant on other foundries.
Demand shows zero sign of softening - not since crypto, and AI just keeps it going.
40 year old gamer here having a flashback of all anti- competition practices Nvidia sustained for decades. Who here remembers GameWorks and PhysX effectively sabotaging multi-vendor optimization in titles like Witcher 3 and Watch Dogs? Expensive Gsync monitors? Trying to force OEMs to be GeForce partners in exchange for full GPU support? Forcing EVGA exit from the market? And then completely shafting gamers when crypto and AI markets opened up?
Another 40 year old gamer here. I remember all of it. (https://www.youtube.com/watch?v=ZcF36_qMd8M one my fav videos on the matter)
I also had the displeasure to work with nvidia. After years of pushing gaming cards on us for compute, the years I spent working with nvidia was full of conversations where they would list silly excuse after excuse as to why we should use the expensive enterprise-grade cards instead. All the while, we begged them to unlock driver features that were available to Quadro cards but not GeForce cards, features as simple as hardware acceleration pass-through on a remote desktop connection. It took them a full-on epidemic, where remote work became super common, to allow some of those features to GeForce cards.
So it's really on brand that they tried creating a fake scarcity to keep their prices up. I don't envy the situation Jensen is in but I won't be sorry for him.
Thanks for sharing the video. What's funny is that YouTube tagged a 10 year old video as AI-generated. Google is another company that's fallen hard from grace.
Not defending NVIDIA by any stretch, but I think Intel is the only one that allows ‘enterprise’ features on their consumer cards, like SR-IOV.
Such a complete failure of the market that NVIDIA hasn’t had any real competition. All of the vendors abandoned PC gamers though. Though the price choke point is memory, not cores.
Which makes me curious, if AMD did another HBM-based card like the Vega series, would that RAM be cheaper now than GDDR?
> but I think Intel is the only one that allows ‘enterprise’ features on their consumer cards, like SR-IOV.
They do not. SR-IOV is only available on Arc Pro cards.
https://www.intel.com/content/www/us/en/support/articles/000...
https://www.phoronix.com/news/Intel-SR-IOV-Only-For-Arc-Pro
> real competition?
many have asked why AMD doesn't make its GPUs cheaper.
lisa su and jensen huang not competing with each other on price and being related is as much of a coincidence as wuhan having a virology institute experimenting on COVID-19 and being the center of the COVID-19 outbreak
> I don't envy the situation Jensen is in but I won't be sorry for him.
Connected. Complete lack of integrity.
If he cheats on his wife, and on his customers, he'll probably cheat on his shareholders. Hence having to quit before he's pushed.
Well - the situation with his wife or being unable to control his Jenwong or whatever one would call it, is still a private matter (the allegation of the spy situation is a bit more complex, but the other affair he had going, or at the least one, losing track here of his personal love life), is at the end of the day not really something that is or should be in the spotline for others, even though it has already generated tons of meme videos. People are very happily putting memes about the ex CEO right now - he is probably one of the top #3 meme people right now. The other day I saw where he approached two female podcasters; it suddenly had such a creepy vibe, given his weakness for females ... (though that was not a meme as such, just some seemingly accidental Jensen sneakily creeping in situation ... can't stop him zooming in on the ladies, apparently)
But customers having to pay more due to NVIDIA milking them - now that's something that really would require mandatory jail time for all NVIDIA folks involved here, IF true and verified in court (right now we can only speculate, even if we have extremely convincing proof; the courts would have to come to such a conclusion at the end of the day; and for this, the court systems have to work. I have severe doubts the courts work in the USA right now. It seems a billionaires-controlled court. Why is the whole Epstein network not investigated? Why is only Ghislaine in jail? A single person master-minded +5000 sex slaves over some 20 years or so? How is that even logistically possible?).
Owning three percent of one of the most valuable companies in the world is a completely unbearable situation to be in.
As another almost 40 year old gamer, I find myself wondering why nobody else ever brings up 3dfx when discussing Nvidia. I've been salty with them since the buyout.
There was an article on here just a few days ago about an Nvidia crypto GPU that was sold a few years ago. This lady discovered that via voltage glitches she could turn back on features that Nvidia had turned off. She had cards that were sold with only 8 gigs of VRAM enabled that actually had 80 gigs of VRAM.
Yeah I never really shared the adulation the AI community still seems to have for Jensen. To me he was always a sleazebag.
This was the discussion - https://news.ycombinator.com/item?id=50451903
selective binning of semiconductors is not a new or inherently evil practice. that being said, someone managing to get a 170hx to 80 gigs is possibly the most prominent example of unlocking manufacturer restricted features.
80gb to 8gb seems like a bit more than normal binning (eg 5800x3d with bad core/etc cut down to 5600x3d).
HBM is quite expensive so it's strange to see so much disabled.
54 year old TF2 player here, I do remember.
NVIDIA has been terrible to countless groups over the years(even more than you listed). They survived by being really good. You know who else have been jerks? Every other leading successful tech company (NVIDIA is nothing compared to Microsoft's misdeeds for example). Microsoft still going after 51 years. And now a new generation having never remembered the browser wars have fully embraced Microsoft products like VSCode. Your trip down memory lane reminded me about the numerous 'gamer boycotts' that all failed. There used to be a meme about how people signing a pledge boycotting a title would then be seen 'online' on Steam playing said game. At the end of the day most consumers didn't care. They wanted the best products and NVIDIA more often than not delivered. A company that is super polite to all their customers and partners is a company that will still be dropped the second their products stop delivering the value that customers expect.
True. As much as we hate on companies like Microsoft and Nividia, or people like Bill Gates and Elon Musk, it has to be acknowledged that above a certain level, it's a eat-or-be-eaten world, and I'll never reach that level.
Yup, they've been sleezebags all along. Nvidia has always treated their software as a tool to nobble the competition.
They're just another rank monopolist. We should celebrate their fall, maybe there will be room for some real competition.
>We should celebrate their fall, maybe there will be room for some real competition.
How are you going to get more competition when the entry cost is so high? The only competition will be the Chinese willing to dump endless cash into this but they are not doing it out of the goodness of their hearts either and it will still take years. If NVIDIA starts to falter then in the short term things will get even more painful for consumers as AMD becomes the new crummy company people love to hate.
I always thought that Nvidia's presence in the Khronos Group was a farce. On one hand they were vendor-locking as much as possible at the expense of the industry, and on the other they were "contributing" to the open languages and protocols.
Dirty secret of "open" source: it's a strategic collaboration between big vendors. It's very rarely someone's hobby project. Almost all Linux changes come from hardware vendors.
I thought we knew a year ago that nVidia was doing circular finance?
https://www.theguardian.com/technology/2025/dec/28/nvidia-in...
Most bubbles you see coming from a mile away. You just don't know how many miles away the actual pop is.
When a bubble pops, the pop typically takes years to happen. It's more of a slow deflation in most cases. Afterwards, you can easily spot the peak that would never be reached again but, during a "pop", it's not clear if you're past that peak or if you're just experiencing a momentary blip on the path to new highs.
Nvidia is likely not going to surge back to $240 soon. It might go lower actually. Skeletons are still falling out of closets. Huang may have been the tech founder's tech founder, but he kept some pretty nasty company in recent years and, as we're now finding out, got both himself and his company into shady territory. As it turns out, ethics are not just for aesthetics.
Is Nvidia slowing down for a year or two bad for AI as a technology? Probably not. Nvidia could find a leader that will return them to top form, or another company could take advantage of the situation to catch up and surge past. A lot of AI researchers have been calling for a pause or, at the very least, a slow-down. This might be just what was needed.
However, given Nvidia's utterly unique position as both hardware supplier and bank for the data centre build-out, what will the impact be on the rest of the AI sector? The market is going to have to price in a weaker and slower build-out as well as a loss of trust in Nvidia. That's clear downwards pressure. Is it a blip, or are we now past the peak?
It’s not the only indication that we are past the peak, I think. OpenAI’s failure to raise what they wanted, Anthropic’s likely junk rating, banks struggling to offload AI debt at fairly deep discounts, Oracle’s obvious problems, the strength of open weights and open source, a loss of confidence in Coreweave etc.
As you say, if Nvidia is chastened enough to slow its banking endeavours and that lets air out of the bubble in a progressive rather than dramatic way, that’s probably better for everyone (except OpenAI, who are probably hosed in that scenario, as they have huge commitments but are struggling to raise what they need; Anthropic might last long enough to reassess)
Yep. Slowly and all at once.
Especially if you ignore or avoid the evidence in front of your eyes.
Then why am I having trouble getting the GPU capacity I need?
Most of the GPUs that have been sold haven't been plugged in because there isn't enough electricity in the world
replace world with US
there is plenty of electricity in china
GPU scarcity is a really poor proxy for the health of the AI market. I don’t know if I should be surprised that someone so bullish about it doesn’t understand this.
you should not be surprised. paper millions already borrowed against at stake
Did you read the OP? Because Nvidia gave money to people who aren't you, so those people could give the money back to Nvidia for GPUs. In other words they gave away all of their GPUs in exchange for stakes in startups, because they were betting that VC hype and the perception of high demand generated from doing so would be worth more than selling GPUs normally.
Does the math check out, though? For reference, Nvidia added $17B of non-marketable securities in 2025, and its total revenue was $215B. So, assuming all these equity investments went to GPU purchases, they only amount to 8% of its annual revenue.
Since these firms (neoclouds and AI startups) will get consolidated if Nvidia puts too much money into them, I assume the majority of their funds are coming from elsewhere.
17B sounds low.
> Corporate development-led AI equity investments alone exceeded $40 billion in just the first four months of 2026
The accusation in the headline is that this activity contributed to the general shortage of GPUs which would, if true, increase their pricing power and profit margins even on chips sold to other customers. So I don't think it's a direct comparison to their equity deals.
Is this the only reason Nvidia made money? No, obviously. But is it adding fuel to the fire? If there is a bubble will this make the fallout worse? Seems likely.
More importantly this suggests a second plausible reason the board might have wanted to wrest control of the company away from him. (The other hypothetical one being that he was doing illegal stuff.)
if circularly financed neoclouds are 5% and singapore china flow is another 12% things suddenly dont look so good
According to Gemini, Nvidia added $43 billion in direct equity stakes,$36 billion in AI compute partnerships, and $100+ billion in loan lease guarantees, which works out to $63 billion this year, $20 billion for the next 3 years, and $10 billion for the last 6 years based on it's assumptions.
So about a third, a sixth, and a twelth of their annual revenue respectively.
I think the larger concern is that both the revenue and assets/agreements depend on Nvidia maintaining sales, market share, and their share of capacity at TSMC/etc... If they run into trouble on any of those fronts, their revenue and assets could take hits from multiple directions.
Just like we knew for at least a year already about the sales through Singapore. A lot of people called it for what it is at the time already (see for example: https://www.ft.com/content/6b1ce190-24d4-4f39-a518-ef9dae5fa...). And yet, things unrolled very slowly, then suddenly.
My theory is that once new CEO is found, especially if he comes from the outside, he will be highly incentivized to denounce past sins and disclose as much as possible to start with a clean sheet. I would bet that this is one of the main reasons the stock is tanking. House of cards is about to collapse, and that may be the trigger.
People pointed it out as early as 2023...
We did but people simply keep pretending it’s not happening.
Between the circular financing and behaviour some analysts call “channel-stuffing”, it does seem that with Jensen Huang gone, the music is perhaps about to stop.
No one seriously denies the actual activity was happening, they just dispute its implications, and for good reason. Vendors frequently extend financing with the hope of making more sales, the most obvious example being auto loans and BNPL
Vendor financing is already a sign of an unhealthy market. When widespread, almost always. If the only easy way you can borrow enough to buy a thing is from the vendor, that’s bad. And if vendor financing is an increasing, not decreasing, proportion of the finance in a market, that’s worse.
Channel-stuffing, if it is happening, is usually plain illegal.
The implications are obvious: if people are using GPU scarcity and prices as a proxy for AI demand (and they absolutely have and still are, at every level), and use it as an indication that they must secure GPUs while they can, then it matters a lot if in fact that demand is being padded out and front-loaded in various ways.
The enthusiasm for consumption seems real, though. Very large enterprises would purchase many more if they could.
Yes, but also, vendors are best positioned and most incentivized to be the lenders for their customers. They often just provide unbeatable terms compared to all options, even better than cash for those who do have that option and ability.
A financing company usually is fully taking the credit risk. They have to charge a high interest and hope their underwriting process is sound. That is generally the only way they make money from the transaction.
A vendor can give 0% interest or even a discount to financing customers because they are protected by the profit margin of the transaction. They can also have a looser underwriting process and take more credit risks while doing so.
>Vendor financing is already a sign of an unhealthy market. When widespread, almost always. If the only easy way you can borrow enough to buy a thing is from the vendor, that’s bad. And if vendor financing is an increasing, not decreasing, proportion of the finance in a market, that’s worse.
How much % of car loans are vendor financed?
Almost none. Dealerships will arrange financing for you, but the actual financing comes from a third party financial institution. The dealership walks away from the deal with the full cash value of the sale; and maybe a kickback from the bank. The concerning thing with vendor financing is that the vendor is supposed to be in the widget business, not the financing business. If they are getting into the financing bussiness, that is generally a sign that the professional financers don't want to get involved; which is not a good sign.
You're being deliberately obtuse. Every auto manufacturer has a captive finance arm. That captive finance arm may be operated by a financial institution, but the financing is subvented by the auto manufacturer. Chase isn't offering 0% financing on a Subaru because they like the car, they're offering it because Subaru pays them to.
This is, nevertheless, a quite different story. Nvidia does not have a captive finance company.
The concern has to be that ordinary financial institutions might not make such loans to startups, and that therefore Nvidia is using vendor finance to create sales that otherwise would not happen.
Rather than the auto loan system, where essentially the front face of an entire finance industry has moved into the dealerships but you can still get a car loan outside it.
> Nvidia does not have a captive finance company
You don’t need to when you have a few dozen customers you’re doing this for. You meet with them and plot world dominance over cocktails.
Auto companies have the structure they do to support 1000s of dealerships and millions of customers.
captive lender originations account for between 20% and 30% of the us auto loan volume depending on whether you count the loans or the volume
Bullshit. Most of our economy is financing. Airlines are literally credit card companies with some aircraft leases attached.
Right but aren’t you kind of underscoring the point? It’s not really the kind of vendor finance we are talking about then; it’s really just the finance industry moving into loaning other things, moving the storefront into another business. It’s pretty highly regulated.
Vendor finance of the kind Nvidia is doing is different: they are the single vendor for one thing, they are loaning to startups who otherwise might not get funding from banks, it’s coming from the same balance sheet as the product, and these loans are materially causing GPU scarcity.
In general, vendor finance of the kind Nvidia is doing is indicative of an uncertain market, and when it’s the only vendor and it causes the price of the thing to rise, that’s obviously bad.
The industry is very aware that it relies on this for its continuing growth and stability.
I don’t know, because I am in the UK and I don’t know exactly what definition of vendor finance you’re working with.
For example, here in the UK, that is extremely regulated, and you’re usually not buying with the dealer’s money, or the dealer chain’s money. Sometimes you are buying with the manufacturer’s money (through a regulated subsidiary finance company or joint venture) but most of the time you’re simply buying with money from a regulated finance company, from which the dealer is getting an introducer’s fee (and for which they must agree to be regulated).
(I am not a driver and have no car loans but I am reasonably familiar with the business model from previous client business)
It is my understanding that Nvidia is pretty directly using their own money for this: there is a criticism that they are essentially “selling their balance sheet as a service”, and that their total exposure is about $200 billion.
Nvidia’s loans are not, in that sense, particularly comparable to even the loosest definition of auto loans. Not least because there’s no competition for the products.
This is all putting aside how much money Jensen Huang has persuaded others to loan. Perhaps that side of things won’t go away; I think we might see him carrying on that function in some future capacity. But it will almost inevitably be at a much smaller scale, because the market is significantly less enthusiastic about lending more money.
it's also an issue for cat companies. they get a double whammy during economic downturn because demand drops and supply rises (due to repossessed data flooding the market)
Why is Nvidia financing neoclouds to buy Nvidia chips to rent to AI customers instead of owning the DCs themselves? At least it was my understanding that run their own DCs for GeForce Now for example
You might as well ask why they don't just keep all their GPUs and compete directly with Anthropic and OpenAI to make frontier models. The answer is the same, Nvidia's core competency is hardware and although they dabble up the stack they would rather stay focused on the GPU business. It also provides a degree of separation where they can bet on many different neoclouds and AI businesses, and some may fail but there will be survivors and winners.
Well, they own chunks of Coreweave and Nebius I think?
I didn't know that, I thought it was just financing deals as I never looked closely into it. It looks like the ownership is lowish in both though (from what I can fine)
Cisco did the same circular finance during 1998-2000 dot com bubble and Cisco crashed after that.
I just am unable to understand whether it's a bad thing or not, you could frame it as being circular, but you could also see it as Nvidia simply giving hardware in exchange for startup equity, is that really fundamentally problematic, is it the scale at which it was done, or is it a valid but risky tactic?
The scale is the largest factor, I think. If vendor financing is happening in a mature multi-vendor market on a small enough scale as to not constrain supply, it’s a less unhealthy situation than when there is only one vendor.
Nvidia wants to ensure data center companies that are optimized for AI like Nebius stock their buildings with Nvidia chips instead of AMD or ASICs so of course it is smart business sense to partner with them or take stakes in them.
Nvidia gives Nebius first access to their newest chips, ensures they get deployed at top performance, allows Nvidia to recognize the revenue upfront, and ends up owning equity in the upside.
Nebius gets the best chips first, gets cheaper financing due to the obvious security granted by having one of the most valuable companies in the world standing behind them, etc.
It sounds like a mutually beneficial deal rather than something shady to me.
By the way they report demand is 10x supply so I think everyone in here hoping for some cheap GPUs soon is kidding themselves. Eventually RAM might get cheaper because it's easier to build new factories to produce commoditized RAM but TSMC is the bottleneck for advanced chips and it isn't resolving anytime in the foreseeable future.
I'm buying the dip from this silliness.
Jensen & Nvidia were never AGI / ASI pilled.
As a result they never seriously pursued frontier research for open models - which could have easily absorbed any excess compute they planned for.
On the other side their customers are rapidly becoming their competitors and will happily eat up spare capacity at TSMC if nvidia can’t fulfill its obligations.
Edit: to be fair there are several counterfactuals that could have played out negatively if nvidia decided to go into frontier research or go upstream like Elon and build their own fab. Jensen himself said they were completely focused on building general purpose compute and his bets had turned out to be right so far.
To be fair their Nemotron models are pretty good. The Parakeet speech-to-text model is also pretty good. That being said these pale in comparison to the frontier labs. They should've invested more into it, but I understand that they don't want to piss off their biggest competitors.
A friend of mine works on Nemotron. He stated quite plainly that they intentionally don't push the boundaries for the reason you state. It's similar to when companies create reference designs that show off the features of their real product, like Google and their Pixel phones
* they don't want to piss off their biggest customers.
:D
what's asi
"The reason behind this was to maintain the perception of ongoing high demand and to move an oversupply of semiconductors from TSMC."
Huh. The circular financing was figured out a while back, but this is something I had not seen before.
This could all work out. NVidia stock drops. AI company stock drops. The more efficient approaches to inference and more open models take over for most mid-level applications. The need for insane numbers of data centers is reduced. AI works fine and costs less.
It is completely normal and expected for large companies to invest in others who can use and grow the use of their products. It’s equivalent to a microscope manufacturer investing in a microbiology company.
Here’s a quote about Henry Singleton, one of the most successful ever:
“CEOs need to do two things well to be successful, run their operations efficiently and deploy the cash generated by those operations.
Most CEOs focus on managing operations. Singleton, in contrast, gave most of his attention to the later task. As Warren Buffett observed, very few CEOs come prepared for this critical task of capital allocation.”
I don't care for Nvidia, witness all my PCs using AMD cards for ages and never wanting to buy their stock because some of their practices I disliked.
But I think this is at least to a degree tinted hindsight - it generally makes some sense to have an interest in funding customers who might grow to be even bigger customers. And it's been totally public for ages.
I have no investment in Nvidia and have no reason to like them or hate them.
But I think this is backwards. I remember 4-5 years ago waiting for AWS and GCP to schedule us an 8GPU machine (gcp had 16 even) for hours while paying them crazy rents for the GPUs that paid the hardware in 2 months of usage. This while components and servers were actually cheap.
The hyperscalers are monopolies that eventually some admin will grow balls and will have to break up. But this is wishful thinking and nVidia didn't do a bad job working them around. Now with other monopolies drying out components like RAM from the market, one can actually rent GPUs with less effort from neoclouds.
It doesn't seem like anyone's going to be breaking up any monopolies in the US anymore in the near future, if ever, excepting some really massive sociopolitical shifts.
Mm, willing to bet you have significant investment in Nvidia via index funds.
I live in Switzerland and I am not directly invested. But the Swiss national bank owns many us stocks. Pretty sure we are all somewhat connected to nVidia.
That is a very negative way to state facts. I doubt the neutrality of the authors.
As biological things on planet Earth stuck with this economic system we have skin in the game; aiming for neutrality is an empty platitude
I can likely reveal a whole lot of your biases and upend this phony notion we can't falsify over screen that you're pure in your neutrality
Trying to deny your real biological existence and inherent character flaws that come with is vanity
The neutral person would not downvote; just saying.
A neutral person would not have an opinion on negative or positive tone.
See Futurama for a comedic dramatization of the logic of the neutral character
Exactly.
"Banks allegedly engineered inflation by funding[1] consumer's spending"
[1] aka. credit cards
but thats how banks actually create inflation under the limits of the regulators, isn’t it?
Thats what "spin" is. Things that are technically true but massively misleading, or selectively applied.
While I generally dislike scaling consumer finance up to larger markets, to go with your analogy.
Isn't the "credit" that Nvidia extended secured by the value of the GPUs and Datacenters the creditors end up buying/building? If so then should the value of those things suddenly plummet Nvidia is left holding billions in junk debt?
Yes like iterate appeals to neutrality by people with inherent skin in the game
People who are inherently biased to select themselves, thus upending any rhetorical appeals they are capable of the mythical perfect neutrality they appeal to via generalized words
People don't have to be neutral. Neutrality between good and bad is mediocre. If you disagree with them make an argument, don't just lament the end of enlightened centrism.
enough fallacies here to drown Cicero. ad hominem circumstantial with a side of false equivalence
Yeah but if you're too inarticulate to spell any of them out then all you got is a baseless insult
Worse, I think companies that warehouse gpu's will buy newer more efficient gpu's by the time they get their data centers running but won't resell the older but unused gpu's afraid to let their competitors to make inference.
Isn't that straightforwardly explained by typical hoarding behavior, not " afraid to let their competitors to make inference"? During the pandemic people were hoarding TP that they couldn't possibly use within a reasonable amount of time, but it'd be crazy to accuse people of doing that because they were afraid of their neighbors having clean asses.
Source: https://www.wsj.com/tech/jensen-huang-colette-kress-nvidia-c...
Makes me think back to this!
"Nvidia has been one of the worst trouble spots we’ve had with hardware manufacturers. And that’s really sad because Nvidia tries to sell chips – a lot of chips – into the Android market. And Nvidia has been the single worst company we’ve ever dealt with! So Nvidia, fuck you!” —Linus Trovalds, June 2012
https://m.youtube.com/shorts/e0xE4YBrF5E
hopefully prices come tumbling down, I need a decent GPU stuck with crap at the moment.
Given that is a sentiment I hear, and feel, a lot, it's unlikely the prices will come down much. It seems there is a lot of demand at lower prices.
80-series at MSRP would probably make people happy, though it's more than I'm willing to spend for gaming myself.
There is a lot of demand at higher prices too!
And that is the core of the issue!
Even if NVidia crashed and there ends up being an oversupply of GPUs or TSMC fab slots, this doesn't change that OpenAi and Google still need memory for their own hardware accelerators, so the price of boards wouldn't go down by much
Part of me wonders (maybe naively) if with falling cost of AI inference and improvement of models means there is an oversupply of inference infrastructure. since we may reach a point where no one needs more and everything you could want can be done by the machine and adding more compute for most users is not any kind of benefit (like it was before LLMs there was an obvious ceiling where the majority of people did not need more compute).
I know Jevons paradox is a thing and I could see it going the other way as well but the first possibility seems to be ignored and I am not sure we can. Eventually demand for training might dry up as well if are models become largely very good and only a bit of fine tuning is required for most applications.
I don't see how it helps to think so narrowly about the computation needed solely for training when we are clearly headed to a future where tons of realtime applications (think robots) need to do insane amounts of processing ASAP while doing time-sensitive tasks.
IMO its copium to think that chips which have 10x more demand than supply are suddenly going to be easy to get as "AI is eating the world" like software did over the past decades.
You are definitely right, mrgordon - this isn't an infinite scaling, "one extra copy cost essentially nothing," software issue. Video cards are physical. You can't just sell more copies with almost zero marginal cost like software. Each video card is a physical good that is subjected to all those physical laws.
Some years ago I came across this site: https://sites.google.com/site/1024cores
The author is a developer working on software that scales to 1,024 cores and greater -- which is within spitting distance now thanks to 256-core AMD EPYC processors. If you count hyperthreads as a "virtual core" then a dual-socket system gets you there!
That blog made me realise that almost all software can't utilise 1,024 cores, not even close! Microsoft SQL Server, as a random example, tops out at 64 cores for any single query.
Similarly, people couldn't utilise a machine that big, not with pre-AI software, except for certain embarrassingly parallel codes such as simulations and 3D graphics rendering.
Now... NOW... there's no upper limit. None. One person(!) can cheerfully utilise millions of cores, billions even, and there's no end in sight.
If you think one conversation thread in "ChatGPT" is all we need, you're not seeing the big picture of what's possible here.
Those math proofs OpenAI produced were created with tens of thousands of agents running in parallel, orchestrated by thousands more agents, and overseen by hundreds of agents, all triggered by someone typing as little as a sentence or two to start that avalanche of compute!
With that kind of AI power at your fingertips, huge, unthinkable projects become a fun exercise for the weekend:
- Translate the entirety of Wikipedia to every human language.
- Rewrite the entire Linux kernel to Rust in one go
- Rewrite all open source C code to Rust.
- Formalise every maths paper ever written.
Etc, etc, ... without end, without bound.
Crypto, then AI. Demand for GPU's has skyrocketted, and the number of foundries hasn't (much to the chagrin of every nation state).
Unfortunately these are server sku. I don't think you'd have good odds of getting a video signal out of them.
You don't think the limited availability of consumer gear is at least partly caused by what's going on in the server market?
Similar to the fact that supply of consumer RAM is currently low.
Plus some people are buying consumer gear and trying to use it commercially.
Butter and guns
Same. I replaced the pads and paste on my now ancient RX 580 in the hopes of surviving to the next time prices are affordable.
For anyone wanting to do so - you can! You have to make sure you nail the pad thickness though. That can be tough because it can have changed between revisions of the same card. Thankfully, AI is pretty good at combing through past data to figure out what you need. Also it voids your warranty.
There is no concrete evidence of this.
Do you have any evidence of this? I pretty much just take it for granted that this has been happening.
Forgive me, but I feel the take you describe is part of the broader problem we are experiencing now.
<edit> oh god, I just re-read my response and face-palmed at me. I'm trying to think of how to express what I mean. Here's the shitty version: Dude says "this article doesn't really show any evidence - is just impression." You say, effectively, " do you have any evidence that they don't have evidence?"
Not the greatest of retorts, but I feel compelled to let it stand. I hope you get a little bit of what I mean.
OK. So they're not doing circular financing deals then?
What happens to neoclouds when the bubble pops. nvidia stops circular financing, and all of a sudden they can’t pay their debt. This leads to the DCs getting bought cheaply by hyperscalers and you have a monopolistic AI market with google/fb/amazon and likes are running the show again.
I feel there's just enough value behind the crazy proposition that there won't really ever be a classic .com bubble pop. That's the thing: there actually is a lot of value in this tech. May some of the current big players crash and burn? Sure. But the tech is undeniably powerful - things will, and are, changing.
> there actually is a lot of value in this tech
Unlike that weird technology "the web", the basis of the .com bubble. Turned out to have no value in it!
Sorry deaux, but I can't quite understand your response - you're using a "I disagree with you" format, but it sounds like you agree with me! Can you clarify a bit?
"there are no dark gpus"
The whole AI “GPU scarcity” thing has been a pretty obvious house of cards for a while now.
How do you mean?
Many HNers didn’t know and are now speaking in hindsight. (They love doing that to appear smart) Otherwise they would have shown the receipts about it years ago.
Nvidia did a great job at engineering a central bank-style AI funding bubble for as long as possible. Unfortunately, Cisco did the exact same thing.
Before, there was denial about the circular financing bubble, now look at them believing that a crash is coming.
The article from WSJ that this article is based on tells a completely different story. That it was Jensen himself who was considering pulling out from supporting smaller players because the shortage was forcing bigger ones to look for alternatives to Nvidia.
The conclusion it was doing this to create artificial scarcity is made by the linked article, based on, well nothing. It might be correct, but it's not what the referenced article says.
403 - Access Denied Access denied
Status 403 Trace ID 0HNQ10T1IEVBA:000001B6
Surely this is Nvidia deploying excess capital by acquiring equity in high growth companies at significant discounts (factor in that a major portion of the investment comes back to them against their high margin products). This isn't a new business concept and is generally accepted as smart business? Not some breaking news conspiracy?
> CFO and acting CEO, Colette Kress ... pushed for a reduction in circular financing agreements,
Reducing circular financing agreements seems like ... a good idea?
> in response to which Huang allegedly lay into Kress, calling her a "deer in the headlights,"
From WSJ below. Seems clear they went too far. But not clear Kress can navigate this.
Over the course of the meeting, he proceeded to tear into the woman who is now taking over for him as Nvidia CEO.
Colette Kress was "a deer in the headlights," he said, interrupting her presentation, according to a person familiar with the comments.
He had summoned Kress and his senior finance team to diagnose a ballooning problem: Nvidia was in talks to provide billions of dollars of guarantees to companies that couldn't afford its chips. That included deals led by Huang's son-in-law, Nico Caprez, who had been offering upstart cloud providers and data-center developers financing in the hopes of turning them into long-term customers.
Huang had launched a dealmaking spree and was now starting to question whether it had gone too far, according to people familiar with the matter.
Kress was a "reporting CFO," not someone who could help him define a strategy or make decisions, Huang said during the August meeting.
this is the new off balance sheet transaction
I’m so ready this time, CFO at the helm
This isn't responsive to GP's remarks.
> a major portion of the investment comes back to them
1. circular financing agreements
2. see 1
You’ve now edited the comment I replied to (originally it was just the quote), but it is still not responsive to the OP; nor is your new comment responsive to my earlier criticism.
Well that's actually a hopeful sign for the future. I was a bit worried hearing she'd been conservative about investments in the past... but if the conservatism was about vaguely fraudulent circular financing deals we'll all be better off.
Spot on. Maybe that implies some correction of some sort. Especially to their stock and to the beneficiaries of this circular financing.
I also feel this is a good thing. Looks like the elephants in the room are being addressed.
> (factor in that a major portion of the investment comes back to them against their high margin products)
One problem is that there isn't one number that indicates what percentage of Nvidia's equity investments come back to it in the form of chip purchases. In some cases, it appears it's 100%; in others, it has been suggested that every $1 invested produces >$3 in revenue. $1 invested for $1 in revenue versus $1 invested for $3 in revenue are really different outcomes.
There are also the questions of the revenue and revenue quality of the companies Nvidia has invested in, how much debt they've taken on, what sort of backstops/guarantees Nvidia has given them, etc.
> One problem is that there isn't one number that indicates what percentage of Nvidia's equity investments come back to it in the form of chip purchases.
And why couldn't a single number be calculated for this? They know their portfolio companies, their investment amounts, and the portfolio company purchases of their products.
> There are also the questions of the revenue and revenue quality of the companies Nvidia has invested in, how much debt they've taken on, what sort of backstops/guarantees Nvidia has given them, etc.
These are generally good things to look at for all corporate investments.
The main takeaway is that Nvidia investing in their own customers isn't inherently a bad thing. Investing in a poorly performing company is a bad thing.
Sounds like a terrific investment if you get $3 Revenue plus equity for $1 invested.
What seems to be the problem?
If true then I think it is time to put all responsible folks at NVIDIA in jail. This is collusion to the maximum, if it can be proven in court. I don't think they should be able to just pay a fine - there has to be mandatory jail time for people who build a cartel. Even in the USA a cartel should be forbidden - capitalism as the main religion in the USA, mandates that free market competition leads to lower prices. This clearly can not work if big corporations decide to milk the market. These things have increased insanely when the orange king and his cronies seized power.
BigAI has also been artificially boosting demand for and perception of acceptance by paying for lots of shills in socmedia. astroturfing. I can even think of 3 multi-$MM rewards made in the space to pro-AI boosters (OpenClaw guy, Bun guy, Omarchy/DHH). arguably a 4th if count Linus too, via the Linux Foundation sponsorship
Well how else could OpenAI who is basically synonymous with AI to laymen have spent nearly $6B in 2025 on marketing? 7 out of 10 YT videos I watch are also sponsored by some random AI company, which to me is just insane: how does every AI startup have unlimited funds?
In what worlds would Nvidia not invest in adjacent startups? In what worlds would these startups not be encouraged/obligated to use their investors hardware?
A WSJ article filtered through a gaming enthusiast website filtered through a general tech enthusiast website.
Here’s the original article: https://www.wsj.com/tech/jensen-huang-colette-kress-nvidia-c...?
I wonder how many shocking revelations we will receive from the current media circus. What is next, that NVidia was seeking profit?
I thought we knew this already? Seems like some nice info is being redrummed up.
I imagine the shortsellers and put option holders like that.
I mean, preventing bubbles is literally the reason short sellers are allowed to exist. When they see a stock that is overpriced, they help it correct. Innocent people lost a lot of money on Enron.
What scares me is that anybody could believe this garbage. It costs me $1 to make, I sell it for $5. Good deal! In fact, such a fabulous deal, I'm going to do this: Make 2 for $2, sell one for $5, then loan these other dudes the $3 I made in profit plus go $2 in the whole for a total of $5 so that they can give me the $5 back.
The more often you do it, and the greater the margin becomes due to squeeze, the dumber it is.
What you see is liquidity demands outpacing the system's ability to supply, and this his how industry partners in the chain keep the cause spiraling upwards.
So the CEO 'laid into' the CFO but sounds like she didn't push back all that hard. Seems like something leaked by Kress to make her seem clean, but just makes her seem dirty and weak.
If this is truly a problem, it's her job to say no to the CEO. They need to clean house at the top and hire someone like Johny Srouji to right the ship.
Man, imagine if Kodak put out photography courses, or Black Diamond sponsored a climbing team lol.
I find it curious that you would consider those even remotely similar comparisons.
Would hate to see Fender giving artists sponsorphips.
Guys, I have to say: I feel like I've found today's two-minute hate thread.
Has Nvidia done sketchy shit in the past (and very recent past)? Zero argument.
But as I follow this thread, I am seeing more and more pile-on that blames Nvidia for an increasingly staggering series of things that is starting to get out there.
At this point, I am eagerly waiting for this AI song-and-dance to collapse so that I ( and my employer too) can purchase a decent specs system again.
Sorry, ramshanke - there really is a lot of promise to this tech. Will some of the current big payers collapse int he process? Definitely could happen. But there's no way around it: there's a lot of value in this new tech, and it's here to stay.
I still do not see the prices coming down much as the demand for GPUs on the lower end is still pretty high.
Been saying for years that we’ll be seeing a wave of bargain-priced GPUs, memory and hard drives before long. Maybe they can turn these data centers into Amazon distribution centers or apartments.
I'd love to attend a rave at an abandoned data center.
Sorry to see you get downvotes, xvxvx, for an honest (but I feel very incorrect) take, but I understand their impetus: there is a lot of value and power in this crazy new tech. Some companies may bite it, but the cat is out of the bag - in some form or another, the new AI technology is powerful and it isn't going anywhere - and we are already seeing the significant value it provides.
NVidia enables people to buy their products. Oh the horror.
Wouldn’t this be exactly what you do if you wanted to boost the stock as much as possible in the short term?
Seems like a great way to cash out at the top
You don't say!
so if this is true... we should finally get some gpus right?
After previous bubbles there was a lot of excess equipment to be purchased.
The GPUs going in datacenters are not usable at home right?
Depends, you buy a used server off of eBay or 3d print your own fan shroud. Waiting for prices to drop some and then I’m looking to build my own rack in the basement, so I can use open weight models and not directly support horrible data center practices.
Not for gaming they don't have monitor outputs and most of them aren't even in a standard PCI-E format. Some of them might be useful as a home AI accelerator with adapters and jerry rigged cooling.
I have MI50 32GB server cards at home with mounted blowers and I can use them for gaming.
Some of them, sure. You can invest in a server mb, and put a rack in your shed or basement. If someone was selling B100 like that, I'd happily buy a few for 15k. I somehow doubt its going to happen though.
I am not sure how inference constrained we are, btw. As an enterprise customer, I have zero problems with 429s and capacity from google or aws. All large volume inference jobs - so customer journey bots that help our company make money - run on dirt cheap models kept on short leashes in custom harnesses. Message delivery costs us 10x more than inference (with meta price hikes of October). All long-horizon jobs such as coding are probably somewhat inference constrained, but only to the point that sometimes the devs and corporate users with their own agents wait a bit for something to be completed, but nobody is noticing it. Sure, one notices a difference between /fast mode and normal while building software, but nobody really has a reason to care much, /fast modes are a pure luxury thing outside of incident remediation. I don't see what would Anthropic actually do if they had 10x the compute or 100x the compute they are planning for. Surely, some new business models, trolling mathematicians at a larger scale maybe?
Regulators are asleep at the wheel in case you hadn't noticed
"Allegedly" hahahahahahahahahahahaaaaa aaaaahahahahahahahahahahaha
This is delusional. The startups needed GPUs and nvda had the ones for AI. How is it even engineered they weren't forcing them to buy peanuts they didn't need but something they needed.
I wonder if I’m noticing the odd timing of everything too much, or whether there’s an effort to air as much of Nvidia’s dirty laundry as possible.
No idea to what end, Nvidia stock collapsing would probably be enough to bring on the AI crash with no hope of gradual rebalancing (like the drop we saw a week ago) and most likely take the US economy with it.
It’s not like anyone will get cheap RAM suddenly if that happens, more like lots of people will lose their livelihoods.
A product I work on had a big and quite public bug bounty payout recently. That led to an upswing in bug bounties reports. That's not odd timing, that's independent (human) agents sensing something as being valuable of their time poking at it.
I dunno, Nvidia's dirty laundry (dude's inability to keep his whatsit in his pants) seems like exactly the kind of thing that is inevitable to come out (oh god, that pun wasn't intentional).
No need for conspiracy here, personal weakness does in so many high flyers.
But I agree that the tech cat is out of the tech bag, and there's no going back: Nvidia doesn't make their own chips, they are almost fully reliant on other foundries.
Demand shows zero sign of softening - not since crypto, and AI just keeps it going.
Silicon Valley grifters, the whole industry is a Barnum Bailey freak show scam; Ed Zitron is 100% right.
Possibly Apple is the least sleezy, by defacto of being late to the SI scam party.
> Ed Zitron
He's been claiming what this article is claiming for months now. It's sad that most media outlets still pretend to not know who he is.