Huang rejects 'circular financing' label for NVIDIA's AI bets

NVIDIA CEO Jensen Huang has dismissed allegations that the semiconductor company is subsidizing its own AI demand, saying the company’s investments are immaterial when compared with the business they help create. At the Goldman Sachs Communacopia + Technology Conference, Huang dismissed the theory that the growing investment ecosystem of NVIDIA constitutes circular finance.

Huang’s defense moves the debate on to bigger issue: as chipmakers, cloud companies and AI labs keep investing in each other, just how much of the demand in today’s world is organic — and how much financial risk is being created?

Why the “funding its own demand” charge sticks

One can read the worry easily. NVIDIA is investing in either an AI firm or a cloud computing company; that firm then buys certain NVIDIA hardware, and the revenue flows back to NVIDIA. This is not to say that the demand is not real, but the distinction between an investment and a sale becomes blurry.

One can read the worry easily. NVIDIA is investing in either an AI firm or a cloud computing company; this results in that firm purchasing certain NVIDIA hardware, bringing revenue back to NVIDIA. This is not to say that the demand is not real, but the distinction between an investment and a sale becomes blurry.

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