Nvidia’s AI deals top $750B, reviving circular financing fears

Nvidia ↘ 0.92% is negotiating two massive AI infrastructure arrangements that together could exceed $750 billion, raising fresh concerns from critics who warn the chipmaker is effectively bankrolling its own customers to sustain demand for its products.

The Deals

On Saturday, July 25, Nvidia and South Korea's SK Group announced letters of intent for a $500 billion-plus partnership spanning AI data centers and next-generation memory development. Under the agreement, SK Telecom will build a two-gigawatt AI data center powered by Nvidia's upcoming Vera Rubin processors and SK Hynix's HBM4 memory chips, while SK Hynix will serve as Nvidia's long-term supplier of high-bandwidth memory.news.skhynix+3

The following day, The Wall Street Journal reported that Nvidia is in separate talks to provide a roughly $250 billion financial guarantee for OpenAI as part of a data center project in southern Ohio being developed by SoftBank's energy subsidiary. The guarantee would help OpenAI lease a planned 10-gigawatt campus despite lacking an investment-grade credit rating, with the total project cost potentially exceeding $500 billion. Nvidia is also reportedly discussing a separate financing arrangement for OpenAI's chip purchases that could total $350 billion.thedailystar+4

The negotiations remain preliminary and could still collapse, according to people familiar with the matter cited by the Journal.reuters

Circular Financing Concerns

The proposed OpenAI backstop builds on a pattern that has drawn scrutiny since September 2025, when Nvidia announced it would invest up to $100 billion in OpenAI to help deploy 10 gigawatts of Nvidia systems. That deal was immediately criticized for its circular structure — Nvidia invests in a customer that uses the funds to buy Nvidia chips, creating an appearance of demand growth that may partly reflect recycled capital.pon.harvard+2

Harvard's Program on Negotiation described such arrangements as resembling "round-tripping," in which companies invest in each other to post inflated revenue without increasing actual profits. NPR reported in November 2025 that concerns were escalating that "insular growth is contributing to a bubble — a market not actually supported by real consumer demand".npr+1

Scale and Skepticism

Over the weekend, "Big Short" investor Michael Burry and tech commentator Ed Zitron both voiced concerns about the latest guarantee discussions. The IO Fund noted in June 2026 that analysts expect Nvidia to generate $136 billion in cash from operations in 2026 against stated capital expenditure guidance of $125 billion — figures that raise questions about how the company could credibly backstop obligations many times its annual cash flow.io-fund+1

Defenders counter that the arrangements reflect genuine demand for AI compute infrastructure and that Nvidia's guarantees function more like vendor financing — a common practice in capital-intensive industries — than fraudulent round-tripping. The talks nonetheless represent an unprecedented concentration of financial risk in a single company's ability to sustain the AI buildout it supplies.investing