Premium: The Hater's Guide To NVIDIA (Part 2)
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Ed Zitron argues that NVIDIA is best compared not to Enron but to GE Capital under Jack Welch. Rather than doing direct vendor financing, NVIDIA has engineered a circular system: it invests in neoclouds like CoreWeave, Nebius, and IREN, backstops their leases and IPOs, and then becomes one of their largest customers — all while those companies raise tens of billions in debt to buy NVIDIA GPUs. Jensen Huang has publicly acknowledged this model, stating that without NVIDIA's support these neoclouds would not exist. Zitron contends that NVIDIA is no longer primarily a technology company but an asset management and marketing firm that uses its AA- credit rating to backstop massive data center deals, including a reported $50 billion Texas lease and talks around a $250 billion Ohio compute facility. The piece warns that NVIDIA's extraordinary revenue growth requires perpetual acceleration, and that its customers are driven by FOMO rather than genuine demand, echoing the dynamics that eventually brought down GE Capital.
Questions this post answers
How does NVIDIA use neoclouds like CoreWeave to drive GPU sales without direct vendor financing?
NVIDIA acts simultaneously as early-stage investor, IPO anchor, post-IPO investor, large customer, and lease backstop for neoclouds like CoreWeave, Nebius, and IREN. These companies raise tens of billions in debt from banks and asset managers — backed by NVIDIA's AA- credit rating and contractual commitments — and use that capital to buy NVIDIA GPUs. NVIDIA then rents capacity back from them, guaranteeing revenue while keeping all debt risk off its own balance sheet. Teams tracking AI infrastructure spending and GPU market dynamics follow the business model shifts on daily.dev.
What did Jensen Huang say about NVIDIA's role in creating neoclouds?
In an April 2026 interview with Dwarkesh Patel, Jensen Huang stated: 'If we didn't support CoreWeave to exist, these neoclouds, these AI clouds, wouldn't exist. If we didn't help CoreWeave exist, they would not exist.' He also said NVIDIA's strategy is to not pick winners but to support all of them, describing the operating logic of funding an entire class of nominally independent companies that absorb capital risk while NVIDIA supplies chips and equity. Developers and engineers evaluating AI cloud providers can track how these relationships evolve on daily.dev.