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Nvidia shares fell on Monday after Bloomberg reported the company is assembling more than $750B in fresh AI deals. The broader market held flat.
First, Nvidia is in talks to provide a roughly $250B financial backstop for OpenAI's lease of a massive data center in southern Ohio.
Second, a partnership with South Korean conglomerate SK Group covers more than $500B in combined business between the two companies, including memory chip purchases and AI data center builds on the Korean Peninsula.
The Ohio data center is a 10-gigawatt facility being developed by SB Energy, a SoftBank subsidiary, on a decommissioned uranium-enrichment site roughly 50 miles south of Columbus.
Nvidia is also in separate talks to finance roughly $350B of OpenAI's chip purchases for that same project.
On the same day, Nvidia announced a substantial investment in Safe Superintelligence Inc., the AI startup co-founded by former OpenAI chief scientist Ilya Sutskever. People familiar with the matter said Nvidia committed $5B.
The core concern is circular financing. Nvidia provides capital to companies that use it to buy Nvidia chips. If AI fails to turn a profit for those companies, both sides of the arrangement face losses simultaneously.
Gary Tan, a portfolio manager at Allspring Global Investments, put it plainly: "Capital is increasingly being used to fund future AI customers and infrastructure deployments."
The cost of protecting Nvidia's debt against default surged by the most on record Monday. Nvidia's supply-related commitments have already climbed to $119B as of Q1 FY27, up from $45.8B just three quarters earlier. Multi-year cloud service commitments reached $30B.
Bloomberg Intelligence analyst Mandeep Singh flagged the key risk on Bloomberg Television.
"If things take a pause, even if it's for six months, that's not going to go very well for them."
Mandeep Singh, Bloomberg Intelligence
The dot-com comparison breaks down on one key number. Nvidia generated $48.55B in free cash flow last quarter alone on revenue of $81.61B.
Gross margin sits at 75%. Cisco, the standard dot-com cautionary tale, had no comparable financial foundation when it rose to become the most valuable company on the planet in 1999.
Nvidia's forward price-to-earnings ratio is 24, with a PEG ratio of 0.57. Analyst consensus puts the price target at $302.83, with 48 buy ratings and 10 strong buys.
CEO Jensen Huang has pushed back on circular deal criticism before. He described the CoreWeave investment as "a small percentage of the amount of money that they ultimately have to go raise" and called the circular framing "ridiculous."
Taiwan Semiconductor Manufacturing provides a reality check that supports Nvidia's position. The company raised its full-year growth guidance to slightly above 40% in US dollar terms and committed $52B to $56B in capital expenditures.
TSMC also announced a fresh $100B US investment, bringing its total American commitment to $265B. That level of capital deployment from the world's dominant chip foundry reflects genuine infrastructure demand.
Prediction markets assigned a 97.7% probability to a down day for Nvidia on Monday, but only a 47% chance the stock closes above $200 by month end.
Traders appear to be waiting for proof that the build-out translates into returns before bidding the stock back up. Nvidia's Q2 FY27 revenue guidance of $91B will be the next concrete test of whether the infrastructure bet is paying off.
