$24 Billion AI Deal From Nvidia Blitz Has Wall Street Asking Questions About Murky Circular Investments

As Nvidia prepares to release its highly anticipated quarterly earnings, a growing chorus of Wall Street analysts is raising alarm bells over the chipmaker’s aggressive venture capital strategy. At the heart of the concern is a massive $24 billion investment blitz into AI startups—many of which are also Nvidia’s biggest customers—sparking fears of "circular" revenue streams that could be artificially inflating the company's growth.

While Nvidia’s stock performance has been nothing short of historic, reaching a $5 trillion valuation, its dual role as both the primary supplier of AI hardware and a prolific investor in AI companies is now under intense scrutiny.

The "Round-Tripping" Concern

In the first ten months of 2025 alone, Nvidia has reportedly poured approximately $23.7 billion into 59 separate AI deals, a pace that far outstrips its investment activity in previous years.

The controversy lies in the nature of these recipients. Many of the companies Nvidia is funding—such as CoreWeave, OpenAI, Mistral, and Hugging Face—are the very same companies placing multi-billion dollar orders for Nvidia’s GPUs.

Critics refer to this as "round-tripping" or "circular investment." The fear is that Nvidia is effectively subsidizing its own revenue: Nvidia invests cash into a startup, and that startup immediately uses the cash to buy Nvidia chips.


"It’s very murky," said Jay Goldberg, an analyst at Seaport Research Partners, in a recent note to investors. "To what degree is Nvidia investing versus buying demand or subsidizing demand for its chips?"

Echoes of the Dot-Com Bubble

For veteran market watchers, the pattern bears an unsettling resemblance to the "vendor financing" boom of the late 1990s dot-com bubble. During that era, telecom equipment giants lent massive sums to startups to buy their equipment. When the startups failed, the equipment makers were left with bad debt and collapsed revenue.

While Nvidia is taking equity stakes rather than issuing debt, the risk remains that its revenue growth is being propped up by its own capital rather than organic market demand. If the startups it funds cannot build sustainable businesses, the demand for Nvidia's chips could evaporate overnight.

CoreWeave: The Prime Example

The most frequently cited example of this dynamic is CoreWeave, a cloud computing startup that specializes in renting out access to Nvidia GPUs. Nvidia has invested heavily in CoreWeave, which has in turn raised billions in debt collateralized by the very Nvidia chips it purchases.


CoreWeave has aggressively defended the relationship. CEO Michael Intrator has publicly stated there is "nothing circular" about the arrangement, arguing that his company is simply racing to meet an insatiable market demand for compute power.

A "Make-or-Break" Earnings Report

Nvidia maintains that its investments are strategic, designed to foster the AI ecosystem and ensure that its hardware remains the industry standard. However, with the company's stock priced for perfection, any sign that its explosive revenue growth relies on these self-funded loops could spook investors.

As the market awaits Nvidia's Q3 earnings report, all eyes will not just be on the top-line revenue number, but on the quality of that revenue and the sustainability of the massive capital expenditures fueling the AI boom.