AI BriefingNvidia Used Circular Financing to Keep GPU Prices High, WSJ Report Claims
·2026.11.15 03:07
Key point
A Wall Street Journal report alleges Nvidia financed customers to absorb TSMC oversupply and maintain high GPU prices, a strategy that included a $250 billion backstop for OpenAI.
Details
- A Wall Street Journal profile of Nvidia interim CEO Colette Kress reveals that the company deliberately used circular financing deals to keep GPU prices high and absorb an oversupply of TSMC wafers.
- The strategy involved supporting major customers like OpenAI, including a deal with a $250 billion backstop for the world's largest data center, which was later paused as Nvidia downsized its financing efforts.
- Former CEO Jensen Huang defended the practice against Enron comparisons and used a parable about a soup vendor to argue that maintaining high prices and a diverse customer base was essential to the company's valuation.
- The report notes that AI data centers have siphoned DRAM and NAND capacity, causing GeForce GPU prices to exceed 160% of MSRP, with the RTX 5090 becoming unobtainable due to resource redirection to data center GPUs.
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