NVIDIA's $500 Billion Financing Is a Worthless Check: Jensen Huang's Promises Are Now Worth Nothing
NVIDIA's so-called $500 billion financing is just a non-binding memorandum of understanding; Jensen Huang previously promised a $10 billion investment in OpenAI and ultimately put in only $3 billion, with zero data centers built.
The video won't play here. Listen to the audio instead:
The argument · tap a timestamp to hear it
$500 billion in financing is just a memorandum of understanding
Media reported that NVIDIA is partnering with Apollo, Blackstone and other institutions to finance $500 billion for AI infrastructure, but in reality only a memorandum of understanding was signed, with no legal force. The financing will be split across multiple data center projects, no different from existing practice. NVIDIA has already participated in numerous investments including CoreWeave, so this is not a new move.
— Ed ZitronHuang promised $10 billion for OpenAI and delivered only $3 billion
In September 2024, Jensen Huang and OpenAI executives announced on CNBC a $100 billion investment to build 10 gigawatts of compute, but in the end only $3 billion was invested, and OpenAI has not completed a single data center. Huang later said he "never promised" it, showing his words cannot be trusted.
— Ed ZitronThe meaning of the 25% residual value support mechanism is unclear
On Twitter, Huang said NVIDIA would provide a "residual value support mechanism" covering 25% of the opportunity, but did not explain what that specifically means. The guess is that NVIDIA guarantees the project company's compute revenue so it can borrow to buy GPUs, similar to CoreWeave's financing model.
— Ed ZitronCircular financing: NVIDIA guarantees its own customers' debt
NVIDIA helps customers finance and guarantees their debt; customers use the borrowed money to buy NVIDIA GPUs, forming a closed loop. This is essentially circular financing, because the customers lack profitability. Huang says "demand is real" yet needs debt to create demand — self-contradictory.
— Ed ZitronThe Stargate project is equally hollow
The $500 billion Stargate project announced by Trump, Altman and others in January 2025 actually raised no money and formed no company — it just slapped a label on OpenAI data centers. NVIDIA's deal is expected to end the same way, with the media continuing to endorse it.
— Ed ZitronAnalysts expect NVIDIA to sell $1.6 trillion of GPUs in three years
NVIDIA's fiscal 2026 revenue is $216 billion; analysts expect $393.7 billion in 2027, $565.7 billion in 2028 and $694 billion in 2029, totaling more than $1.6 trillion. But customers would need to borrow to buy, and demand is not large enough to support it.
— Ed ZitronThe murky OpenAI share buyback
OpenAI completed a $7 billion internal share buyback, but the COO departed, and the buyback was funded by company cash rather than outside investors — rare in the industry. Buying back at an $852 billion valuation may reflect a lack of internal confidence.
— Ed ZitronIn their own words · checked verbatim
memorandums of understanding, which are not worth the paper they're printed on
Ed Zitron1:04
In the end, In Video invested thirty billion dollars in open Ai six months after the announcement of the original deal, and open Ai built zero gigawats of data center capacity as a result.
Ed Zitron2:05
this is absolutely circular financing. Nvidia is helping companies raise debt, offering a guarantee on that debt to make sure that the debt is issued, also that Nvidia can be paid using the proceeds from that debt
Ed Zitron5:07
where is the return on investment? His answer was, I shit you not that the return is the usefulness of AI.
Ed Zitron5:07
In Video is expected to sell over one point six trillion dollars worth of GPUs by January twenty twenty nine
Ed Zitron8:13
Figures
| NVIDIA's investment in OpenAI | $30 billion | 2:05 |
| NVIDIA fiscal 2026 revenue | $216 billion | 8:13 |
| NVIDIA fiscal 2027 expected revenue | $393.7 billion | 8:13 |
| NVIDIA fiscal 2028 expected revenue | $565.7 billion | 8:13 |
| NVIDIA fiscal 2029 expected revenue | $694 billion | 8:13 |
| Size of OpenAI's internal share buyback | $7 billion | 9:15 |
| Valuation of OpenAI buyback | $852 billion | 10:17 |
Glossary
- Memorandum of Understanding (MOU)
- A document expressing intent to cooperate, usually not legally binding.
- Circular financing
- A company guarantees its customers' debt so they can borrow to buy its own products, forming a closed funding loop.
- Residual value support mechanism
- NVIDIA promises to cover part of a project's costs to help customers obtain financing.
How to listen
Investors watching the AI bubble and NVIDIA's valuation, tech industry analysts, and founders who want to understand the inner workings of AI infrastructure financing.
The guest introduction at the start can be skipped; go straight to the core analysis.