Core Investment Strategy - Nvidia has made significant investments in OpenAI and Coreweave, with a recent $100 billion investment in OpenAI to support its data center expansion [6]. - Nvidia owns approximately 7% of Coreweave, valued at around $3 billion, and has previously participated in a $6.6 billion investment round for OpenAI [1][6]. - The investments allow companies like OpenAI and Coreweave to access debt financing at lower interest rates, similar to having a co-signer on a mortgage [1][7]. Circular Financing Concerns - Nvidia's investment strategy involves a series of circular deals where it invests in companies that are also its customers, creating a complex web of financial interdependencies [2][5]. - This circular financing may inflate perceptions of true demand for AI, raising concerns about a potential financial bubble in the sector [5][6]. - Analysts have drawn parallels between Nvidia's current practices and past technology bubbles, where similar financing strategies led to significant market corrections [14][19]. Revenue and Valuation Implications - Nvidia's financing arrangements could lead to inflated revenue figures, as seen in previous tech bubbles, where companies engaged in revenue "roundtripping" [4][14]. - For every $10 billion Nvidia invests in OpenAI, it is estimated to generate $35 billion in GPU purchases, equating to about 27% of its annual revenues [13]. - The leasing of GPUs to OpenAI allows the latter to avoid high depreciation costs, shifting the financial burden to Nvidia, which could face inventory risks if demand does not meet expectations [15][19]. Broader Market Impact - Nvidia's dominance as a leading AI chipmaker means its stock is highly sensitive to market perceptions, with minor missteps potentially leading to significant valuation impacts [4][20]. - The company's recent investments in various AI startups and cloud service providers, including a £2 billion commitment to UK AI startups, further illustrate its expansive strategy [11][12]. - Concerns about a bubble are heightened as AI valuations continue to rise, with analysts warning that the distance from concern to crisis is narrowing [20].