Nvidia Defends $4tn Valuation as Scrutiny Grows Over AI Deal Structures

The company, led by chief executive Jensen Huang, has enjoyed a standout year, striking more than $125bn in deals and cementing its position as the dominant supplier of chips powering AI systems such as OpenAI’s ChatGPT. Nvidia’s technology now underpins data centres across the US, Europe and Asia.

However, scrutiny has intensified over the circular structure of some agreements, where Nvidia invests in customers who then use the funds to buy its chips. The most notable example is its long-term partnership with OpenAI, alongside arrangements involving cloud provider CoreWeave. Critics say the model resembles vendor financing, a practice linked to past tech-sector collapses.

Nvidia has strongly rejected comparisons with failed firms such as Enron or Lucent, insisting its reporting is transparent and that it does not rely on vendor financing to drive revenue. Analysts note the risk is not legality but exposure if AI demand slows, potentially leaving Nvidia with equity write-downs and unpaid receivables.

Despite the concerns, Nvidia’s leadership remains confident. Chief financial officer Colette Kress has told investors the company sees no AI bubble, arguing that trillions of dollars of future spending on data centre upgrades and AI infrastructure still lie ahead.