NVIDIA Ex CEO Jensen Huang allegedly use NVIDIA's balance sheet to fund AI startup & datacenter buildouts to absorb over-shipment of semiconductors from TSMC to avoid drop in GPU price, this blows the perception of an organic supply shortage out of the water, it reveals a complex corporate financial move in the AI industry. Buyer / Investors take note that we might have been lied to of a high-end chip shortage and there might have been a corporate financing move behind the reported shortage.
Analysts estimate $200 billion in idle GPUs as former CEO allegedly used balance sheet to fund startups
This report is basically about how Ex NVIDIA CEO Jensen Huang was using NVIDIA's financial power to fund external AI firms. It was reportedly estimated by industry analyst Ed Zitron that there are at least $200billion NVIDIA AI GPU laying idle in warehouses. This was not an organic demand for the NVIDIA's AI GPU, but internal financial gimmick to get rid of the GPU inventory.
Due to NVIDIA over-ordered, there was an avalanche of TSMC silicone and memory surplus that was hitting NVIDIA. To avoid any GPU price drops, Jensen Huang reportedly was funding these buildouts. It was said that the initial underwriting discussion for OpenAI compute can be up to $250billion for 8 gigawatts.
CFO, Colette Kress tried to get a hold of these circular financing commitments to AI firms like OpenAI and Anthropic. She ended up scaling NVIDIA's signed guarantee cap down to about 4.25 gigawatts or up to $125billion.
Based on latest discovery, it seems we were made to believe there was an organic supply shortage, however, now we come to know that Jensen was actually using NVIDIA's balance sheet to fund AI startups. Because of this, Jensen reportedly mocked Kress for asking about the deals. Calling her a deer in the headlights. It's an interesting internal fight over control of the finances vs going all in for aggressive expansion strategies.
NVIDIA hasn't officially commented on the allegations of Jensen Huang financing activities. The report is based on findings that are sourced from industry analysis and internal accounts. We've been keeping close watch on NVIDIA (Check our earlier story – NVIDIA CEO Jensen Huang summoned by US congress over alleged B300 GPU smuggling to China). This just shows you how intricate the financial game being played in the current AI hardware industry.
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