A supplier that funds its own customers is not new. What is new is the size of it, and the fact that the executive who built Nvidia's version is gone.
How the loop works. Nvidia does not hand over cash in exchange for orders: it takes stakes, signs guarantees and promises to buy capacity, which lets its customers borrow and build, and the buildings fill with Nvidia chips.
Nvidia figures are from its 10-Q for the quarter ended July 26, 2026 and its August 17, 2026 8-K. Stock: $239.24 on October 6 to $162.85 on November 13, 2026.
02 Follow one deal round the loop
03 Every deal on the record
04 The web of deals
05 What Nvidia has promised
06 The timeline
07 The last time: Lucent, Nortel and Cisco
08 Why Huang's exit matters
09 Who is exposed
10 What if Nvidia steps back?
01What Circular Financing Is
Circular financing is when a supplier puts money into its own customers and those customers spend it, directly or indirectly, on the supplier's products. In the AI boom the phrase covers three things Nvidia does: buying stakes in AI labs and cloud companies, guaranteeing their leases and debts, and promising to rent back computing capacity they cannot sell.
None of that is illegal, and it helps to separate it from two older ideas:
| Term | What it means | Legal? |
|---|---|---|
| Vendor financing | The supplier lends to a customer, or guarantees its debt, so the customer can buy the supplier's products. The supplier takes on the customer's credit risk. | Yes, and common. Boeing, Lucent and Cisco all did it. |
| Circular financing | The modern AI version: the supplier also owns a piece of the customer, so the same dollars show up as an investment on one side and a sale on the other. | Yes, if it is disclosed. |
| Round-tripping | Money goes out and comes back with no real business behind it, to make revenue look bigger. The SEC said Qwest "fraudulently recognized over $3 billion of revenue" partly by buying capacity it did not need to close sales. | No. This is the fraud version. |
The risk with the legal kind is that a supplier who is also an investor can lose twice, as Bloomberg has put it: if the customer struggles, the orders stop and the stake loses value at the same time. And if the supplier has guaranteed the customer's leases, there is a third bill on top.
Nvidia's answer has always been that its customers pay. In a memo to analysts in November 2025 it said "unlike Lucent, NVIDIA does not rely on vendor financing arrangements to grow revenue," and that customers paid in about 53 days. On the August 26, 2026 earnings call, Colette Kress, then the chief financial officer, said: "We recognize the scale of this support, and we know some will call this circular financing. We see it differently."
02Follow One Deal Round the Loop
The biggest single piece is the OpenAI guarantee in Ohio. Step through it to see who owes what to whom.
From Nvidia's August 17, 2026 8-K. The guarantees take effect when each lease starts, and the first part of the site is expected to be ready in 2028.
03Every Deal on the Record
This is every investment, guarantee and capacity promise I could tie to a filing, a company announcement or a named news report, through November 14, 2026. Filter by type, sort by any column, or download the list.
| Who | Type | When | Amount | Relationship |
|---|
Two things stand out. First, the money is lopsided: one customer, OpenAI, accounts for $30 billion of equity and up to $105 billion of guarantees, more than every other disclosed amount on the list combined, apart from the Wall Street platforms. Second, the guarantees and capacity promises are newer and bigger than the stakes. Nvidia's public and private stakes were worth under $4 billion on its January 2025 balance sheet and $99 billion by July 2026, but the guarantee book went from $3.5 billion to $108.5 billion with the single Ohio deal in August 2026.
Nvidia's own stock portfolio, as filed with the SEC each quarter, is on DaveManuel.com's Nvidia ownership page, and the funds with the biggest bets on Nvidia and other AI stocks are in The Hedge Funds With the Biggest Bets on AI Stocks. The Intel stake sits alongside the US government's own, which I covered in How the Trump Administration Made $34 Billion on Intel.
04The Web of Deals
Each bubble is sized by the dollars Nvidia has put in, guaranteed or promised; the smallest are drawn at a minimum size so their names fit inside. Tap one for the details.
05What Nvidia Has Promised
The question I keep coming back to is whether Nvidia can afford all this. On paper, easily: it made $69.9 billion of free cash flow in the first half of fiscal 2027 alone. But the promises have grown much faster than the business.
From Nvidia's 10-K and 10-Q filings. At July 26, 2026: $279B supply and capacity, $29B cloud services, $25B data center leases, $25B equity investments and $8B capital spending ($366B), plus $56B of AI cloud agreements and third-party leases. Guarantees of $108.5B are not included.
There is a quieter number in the same filings. Nvidia's unpaid customer bills, its accounts receivable, jumped to $63.1 billion at July 26, 2026 from $40.7 billion three months earlier, while revenue rose 18%. Nvidia said the increase came partly from "extended payment terms" given to certain investment-grade customers, and the 10-Q mentions terms of up to a year. That works out to about 60 days of sales, the most in at least two and a half years, and a long way from the 53-day point in the 2025 memo.
06The Timeline
Nvidia's stock against its deals, from the start of 2023. The line draws itself; tap a dot for the deal.
Month-end closes, adjusted for the June 2024 stock split, through the November 13, 2026 close. Source: Yahoo Finance and StockAnalysis.
The deals followed the money. Nvidia's quarterly revenue went from about $6 billion in late 2022 to $96 billion in the quarter that ended July 26, 2026, almost all of it from data centers, and the investing started in earnest once the cash was pouring in.
Fiscal quarters ending on the dates shown, from Nvidia's earnings releases. Nvidia guided to about $108 billion for the quarter ending in October 2026.
The money flowing into AI data centers is tracked on DaveManuel.com's Big Tech AI Spending Tracker, and what it is doing to electricity prices is on the AI data centers and power bills page.
07The Last Time: Lucent, Nortel and Cisco
Every story about Nvidia's deals eventually gets to Lucent, so it is worth knowing what actually happened. In 1999 and 2000 the big telecom equipment makers lent billions to young phone and internet carriers so they could buy their gear. When the carriers ran out of money in 2001, the loans went bad and the orders stopped at the same time.
Lucent and Nortel from their fiscal 2000 10-K filings (Lucent's revenue as restated). Nvidia: maximum guarantee exposure, and guarantees plus the AI cloud and third-party lease lines, against revenue in the four quarters to July 26, 2026 ($303 billion).
By that measure Nvidia's exposure is bigger than Lucent's ever was. But there are real differences, and I think they matter:
- More of Lucent's money was out the door. By the end of fiscal 2001 about $3 billion of its customer credit had been drawn and spent, much of it by carriers that later failed. Nvidia's biggest item, the Ohio guarantee, only pays if OpenAI stops paying rent, starts no earlier than 2028, and OpenAI has to pay Nvidia back.
- The customers are different. Lucent lent to start-up carriers burning cash. Nvidia's biggest exposures are to the two leading AI labs, OpenAI and Anthropic, and to clouds whose biggest customers include Microsoft. OpenAI still loses billions, but it is not a start-up carrier.
- Nvidia has the cash. It had $56.6 billion of cash and debt securities at July 26, 2026, and it produced more than that in free cash flow in the first half of the fiscal year alone.
The similarity is the one that matters most: in both cases the supplier's sales and the supplier's risk come from the same customers, so a bad year hits both at once. For the longer history of how manias end, see The 10 Biggest US Stock Market Bubbles in History and the biggest stock market crashes.
08Why Huang's Exit Matters
Nvidia's 8-K says the board accepted Jensen Huang's resignation as president, chief executive and director on November 11, 2026, effective immediately, and announced it the next day. The filing gives no reason. Colette Kress, the chief financial officer since 2013, is interim CEO and keeps the CFO job, and longtime director Harvey Jones became the company's first board chair.
The exit followed days of reporting about Huang's private life, including an alleged relationship with a woman US officials reportedly suspected of being a Chinese intelligence asset, which Huang addressed in a memo to staff on November 8 and which the board was investigating. I wrote about how those cases usually play out in When Spies Get Close to Power. The financing story is the part that matters for everyone else in AI.
Huang was the deal-maker. According to The Wall Street Journal, citing people familiar with the matter, Kress had questioned how Nvidia chose its guarantee deals, how it valued them and how it calculated the returns, and Huang belittled her in a meeting this summer. The Journal reported that Nvidia had considered a guarantee of about $250 billion for OpenAI's Ohio campus, and that Kress reworked it and cut the first commitment roughly in half before the $105 billion version was signed on August 17. Reuters, also citing sources, reported that she clashed with Huang over AI infrastructure financing. As of November 14, Kress had said nothing in public about the guarantee deals since taking over.
| Stock | Nov 12, 2026 | Nov 13, 2026 | Tie to Nvidia |
|---|---|---|---|
| Nvidia | -4.3% (down 14% intraday) | -2.0% | closed at $162.85 |
| Nebius | -16.8% | -9.9% | about $2B investment |
| Super Micro | -11.3% | sells Nvidia-based servers | |
| CoreWeave | -6.9% | -6.1% | stake plus $6.3B capacity deal |
| SoftBank (Tokyo) | -5.1% | OpenAI investor; owns SB Energy |
Daily moves from StockAnalysis, Al Jazeera, the Korean outlet JKN and AP.
Huang's own fortune fell with the stock; his net worth page tracks it.
09Who Is Exposed
If Nvidia becomes more careful, the companies that borrowed against its backing feel it first. Here is who leans on Nvidia, and how.
| Who | Nvidia stake | Nvidia guarantee or capacity deal | Exposure | Why |
|---|---|---|---|---|
| CoreWeave | ■ | ■ | High | About $47 billion of debt at September 30, 2026 by one count, and $846 million of net interest in the third quarter against $207 million of operating income. Its 2032 bonds yielded more than 16% in early November. |
| Nscale | ■ | talks | High | Private; in talks for Nvidia to guarantee debt on a 460 MW building leased to Anthropic. |
| Nebius | ■ | Medium | Debt rose to about $14.2 billion at September 30, 2026 from about $4.1 billion at the end of 2025. | |
| Lambda | ■ | ■ | Medium | Nvidia is reported to be its largest customer, renting back its own GPUs. |
| IREN | warrants | Medium | Net debt of $4.43 billion and about $6 billion of planned spending still unfunded in early November 2026. | |
| OpenAI | ■ | ■ | Medium | The Ohio guarantee is signed, but more sites would need new backing. Many other investors and cloud partners. |
| Lenders and private credit | platforms | Medium | The $500 billion platforms rest on an Nvidia backstop that is not yet binding. | |
| Nvidia shareholders | Low to medium | Less risk if the guarantees shrink, but less committed future demand too. |
CoreWeave figures from its third-quarter 2026 results and a TechTimes tally of its debt; Nebius from its November 12, 2026 6-K; IREN from its November 5 results; Nscale and Lambda as reported by The Information and Bloomberg.
"If the capital providers now say that Nvidia guarantee is not worth what it was worth a week ago, that puts those neocloud businesses at risk," Joe Kaiser of Switchyard Partners told Fortune on November 12. Christopher Brown of Synovus Securities put it more bluntly: Nvidia's credit support "is what makes much of this debt finance-able."
The politics of who pays for all these data centers are shifting too; see What a Democratic Texas Governor Means for the Data Center Boom. The people with the most riding on the labs Nvidia backs include Dario Amodei at Anthropic, Larry Ellison, whose Oracle has a huge OpenAI contract, and Elon Musk, whose SpaceX now owns xAI.
10What if Nvidia Steps Back?
Nobody knows yet what Kress will do. Pick a path to see who it hits. These are not forecasts; each line is drawn from what the companies have filed and what analysts have said on the record.
| Who | What changes |
|---|
What to watch
- Nvidia's 10-Q for the quarter ended in October 2026, which will update the guarantee, capacity and equity lines.
- Whether any of the $500 billion Wall Street platforms produce a signed deal, and at what backstop.
- Whether the Nscale guarantee is signed, and whether OpenAI's later Ohio phases get new backing.
- CoreWeave's and Nebius's borrowing costs.
- Who becomes Nvidia's permanent CEO.
Sources
- Nvidia, Form 10-Q for the quarter ended July 26, 2026 (commitments, guarantees, equity investments, receivables): SEC; Form 10-K for the year ended January 25, 2026: SEC
- Nvidia, Form 8-K of August 17, 2026 (SB Energy guarantees): SEC; Form 8-K of November 11, 2026 (CEO transition): SEC
- Nvidia second-quarter fiscal 2027 results and CFO commentary: Nvidia, CFO commentary; Kress quote via Fortune, August 26, 2026
- CoreWeave Form 8-K, September 15, 2025 ($6.3B capacity order): SEC; CoreWeave third-quarter 2026 results: CoreWeave, TechTimes; Nebius 6-K, November 12, 2026: SEC
- The Wall Street Journal, "Before His Ouster, Jensen Huang Belittled the Executive Replacing Him," November 13, 2026 (syndicated); Fortune, November 12, 2026; Reuters via BNN Bloomberg, November 12, 2026; Al Jazeera, November 12, 2026; CBS News
- Lucent Form 10-K for fiscal 2000 and 2001: 2000, 2001; Nortel Form 10-K for 2000: SEC; SEC on Qwest, March 15, 2005: SEC; Cisco's lending: Motley Fool, December 6, 2000; Cisco's 2025 high: Sherwood News
- Nvidia's November 2025 memo to analysts: Yahoo Finance; investment counts: TechCrunch, citing PitchBook; deal-by-deal sources are linked in the downloadable list above
- Share prices: StockAnalysis and Yahoo Finance