NVIDIA's $500 Billion Financing Is a Hollow Promise: Jensen Huang's Commitments Are Worthless
NVIDIA's so-called $500 billion financing is just a non-binding memorandum of understanding. Jensen Huang previously promised $10 billion to OpenAI but only invested $3 billion, and zero data centers have been built.
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The $500 billion financing is just a memorandum of understanding
Media reports claim NVIDIA is partnering with Apollo, Blackstone, and others to finance $500 billion for AI infrastructure, but in reality, only a memorandum of understanding has been signed, which is not legally binding. The financing will be spread across multiple data center projects, no different from existing practices. NVIDIA has already participated in investments like CoreWeave, so this is not new.
— Ed ZitronHuang promised $10 billion to OpenAI but delivered only $3 billion
In September 2024, Jensen Huang and OpenAI executives announced on CNBC an investment of $100 billion to build 10 gigawatts of compute, but ultimately only $3 billion was invested, and OpenAI has not built any data centers. Huang later claimed he 'never promised,' showing his statements are unreliable.
— Ed ZitronThe 25% residual value support mechanism is unclear
Huang tweeted that NVIDIA would provide a 'residual value support mechanism' covering 25% of the opportunity, but did not explain what it means. Speculation is that NVIDIA guarantees the compute revenue of project companies, enabling them to borrow to buy GPUs, similar to CoreWeave's financing model.
— Ed ZitronCircular financing: NVIDIA guarantees its own debt
NVIDIA helps customers raise financing and guarantees their debt, and customers use the loans to buy NVIDIA GPUs, forming a closed loop. This is essentially circular financing because customers lack profitability. Huang claims 'demand is real' yet needs to create demand through debt, which is contradictory.
— Ed ZitronThe Stargate project is equally hollow
The $500 billion Stargate project announced in January 2025 by Trump, Altman, and others has actually raised no funds and formed no company; it merely labels OpenAI data centers. NVIDIA's deal is expected to end the same way, with media continuing to endorse it.
— Ed ZitronAnalysts expect NVIDIA to sell $1.6 trillion in GPUs over three years
NVIDIA's fiscal 2026 revenue is $216 billion, with analyst expectations of $393.7 billion for 2027, $565.7 billion for 2028, and $694 billion for 2029, totaling over $1.6 trillion. But customers need to borrow to buy, and demand is insufficient to support this.
— Ed ZitronOpenAI's stock buyback raises doubts
OpenAI completed a $7 billion internal stock buyback, but the COO left, and the buyback was funded by company cash rather than external investors, which is rare in the industry. Buying back at an $852 billion valuation may reflect internal lack of 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 |
| OpenAI internal stock buyback size | $7 billion | 9:15 |
| OpenAI buyback valuation | $852 billion | 10:17 |
Glossary
- Memorandum of Understanding (MOU)
- A document indicating an intention to cooperate, usually not legally binding.
- Circular financing
- A company guarantees customer debt so customers borrow to buy its own products, creating a closed financial loop.
- Residual value support mechanism
- NVIDIA's promise to cover a portion of project costs to help customers secure financing.
How to listen
Investors and tech analysts focused on the AI bubble and NVIDIA's valuation, as well as founders who want to understand the inner workings of AI infrastructure financing.
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