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Nvidia’s $100B OpenAI Investment Raises Circular Financing Concerns
Nvidia’s $100B OpenAI Investment Raises Circular Financing Concerns
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BTCCSquare news:
Nvidia's landmark $100 billion investment in OpenAI has drawn comparisons to Cisco's ill-fated financing strategies during the dot-com bubble. The chipmaker's capital injection will primarily fund OpenAI's purchase of Nvidia hardware - including 4-5 million GPUs requiring 10 gigawatts of power - creating a self-reinforcing demand loop.
The arrangement mirrors Cisco's historical misstep of financing telecom customers to buy its routers during the internet boom. While securing near-term revenue, such circular financing models risk creating artificial demand bubbles. The first $10 billion tranche will deploy alongside OpenAI's initial gigawatt-scale infrastructure buildout.
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