NVIDIA Allegedly Engineered Scarcity By Funding AI Startups To Buy Its GPUs

Following the departure of now-former NVIDIA CEO, Jensen Huang, a new report by The Wall Street Journal (via Wccftech) has emerged alleging that NVIDIA artificially inflated the ongoing GPU and memory shortage by investing in AI startups that would go on to buy NVIDIA GPUs and build data centers. The reason behind this was to maintain the perception of ongoing high demand and to move an oversupply of semiconductors from TSMC.

The situation described in the report saw NVIDIA on the hook for an "avalanche" of GPUs from TSMC, for which it would have no immediate buyers. Part of the issue highlighted by Kress was also that these small-scale cloud providers NVIDIA was investing in could not afford to buy NVIDIA GPUs, meaning they, too, could be a financial dead end.

The WSJ report cites an August meeting between Huang and his senior finance team, including NVIDIA's CFO and acting CEO, Colette Kress, during which Kress pushed for a reduction in circular financing agreements, in response to which Huang allegedly lay into Kress, calling her a "deer in the headlights," after she had pushed to scale back NVIDIA's $250 billion deal with OpenAI. Jensen's push for further investment into small-scale cloud providers was seemingly in response to the changing tide that saw AI hyperscalers move away from off-the-shelf components in favor of custom solutions.

Ass backwards. He was a massive advocate of open AI. He was one Washington’s most influential advocates for a laissez-faire, pro-growth approach to artificial intelligence policy and semiconductor trade.

The competitors want proprietary systems. He had to be removed so it could be locked down in proprietary walled gardens and keep competition locked out.

Now that the Neocons and Big Tech took him down, now they put out stories like this to clean up their crime scene.

So the question that’s gotta be asked: what percentage of Nvidia sales would have happened absent Nvidia’s own money funding the buyers? What percentage of future sales can be expected to occur as the Nvidia money pipe runs dry? What percentage of AI would have occurred, and will occur, absent money from Nvidia?

Easy to believe that NO ONE, including Huang, really knows ... but from all appearances, it seems that AI has made great advances, it seems to be more and more ubiquitous, and moving more and more quickly. Is that all a ponzi scheme that depends on circular financing? And that will disappear once the Nvidia financing goes away?

It’s hard to believe that any more than a slight fraction of AI growth and gpu use was and will be due to funding from Nvidia. After Nvidia started to take off, Nvidia may have been priming the pump by financing AI startups to use its products, but there’s SO much AI and chip use now that it seems pretty self sustaining. The if there was pump priming, well, the pump seems to have been primed.

But: I just don’t know. Therefore, I invoke Freepernalysis to try to figure it out. C’mon Freepers! Can you all figure out if GPU demand is actually strong, or was it all a mirage created by circular financing / Nvidia?

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