Core Viewpoint - Nvidia's recent $100 billion investment in OpenAI raises concerns about a potential financial bubble in the AI sector, as the valuation of companies in this field may not align with their actual revenue and profit calculations [2][9] Investment Network Complexity - Nvidia has established a complex investment network, notably with OpenAI and Coreweave, where investments lead to mutual benefits, creating a cycle of funding and procurement that obscures the true flow of capital [3][5] - Nvidia's investments allow companies like OpenAI and Coreweave to secure financing at rates comparable to established firms like Microsoft, significantly lower than what startups typically face [5][8] Financial Transactions and Implications - Nvidia has committed to purchasing cloud computing resources from Coreweave, with total expenditures reaching approximately $75 billion for GPUs, indicating a strategy where investments are recouped through sales [6][8] - The company has also engaged in similar agreements with other cloud firms, further entrenching its position in the AI infrastructure market [6][8] Concerns Over Valuation Bubble - Analysts express concerns that Nvidia's financing practices resemble those seen during past tech bubbles, where companies provided loans to customers, leading to inflated valuations and eventual market corrections [9][10] - The rental agreements with OpenAI allow the latter to avoid high depreciation costs, placing the burden on Nvidia, which could lead to inventory issues if demand does not meet expectations [9][10] Historical Parallels - The current situation draws parallels to the dot-com bubble, where excessive financing led to unsustainable growth and significant market corrections, raising alarms about Nvidia's current investment strategies [10][11]