What happens when Nvidia Corp. (NASDAQ: NVDA | NVDA Price Prediction) invests $100 billion in OpenAI, and much of that money comes back to it in the form of chip purchases? This is sometimes called “cash being recycled” or “round-tripping.” It raises the question of whether Nvidia would get this revenue without investing.
The chipmaker has invested in several other AI companies. Another one that raises the issue of investment in which Nvidia gets chip purchases in Elon Musk’s xAI.
The concern has started to emerge in the financial markets. Yahoo reports that “Jay Goldberg, an analyst with Seaport Global Securities, compares such deals to someone asking their parents to be a co-signer on their mortgage.”
If the Nvidia practice concern becomes widespread, the perceived impact on its revenue could reach billions of dollars. In the most recent quarter, the revenue figure was nearly $47 billion. That was up 56% from the same quarter the year before. The surge in its stock, which has taken its market cap to over $4.5 trillion, would also be at risk.
Fortune recently published an article titled “Nvidia’s $100 billion OpenAI investment raises eyebrows and a key question: How much of the AI boom is just Nvidia’s cash being recycled?” A major business publication raising the issue in a headline suggests serious analysts have already begun the conversation.
Eventually, Nvidia’s accountants will need to address the issue of round-tripping. In the meantime, the company may find it has to defend itself against the accusation.
Nvidia Price Prediction and Forecast 2025-2030
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