NVIDIA’s recent circular deals: fueling growth or bubble risk?
In recent months, NVIDIA has deepened its AI ecosystem through a series of financing and partnership arrangements often described as ‘circular deals’. These involve NVIDIA investing in key customers and partners who, in turn, commit to significant graphics processing unit (GPU) purchases.
These agreements have locked in billions of dollars in forward revenue, reinforcing NVIDIA’s dominance in the supply chain and accelerating the buildout of next-generation data centres. CEO Jensen Huang has characterised these moves as strategic bets on a ‘multitrillion-dollar AI future’, ensuring NVIDIA remains at the centre of global compute infrastructure.
However, critics argue these arrangements resemble vendor financing practices from the dot-com era, where inflated commitments masked underlying demand weaknesses. If AI adoption slows or macroeconomic conditions deteriorate, these interlocking dependencies could amplify risks, potentially triggering defaults or write-downs across the ecosystem.
The scale of these deals is significant. For example, OpenAI has committed more than $1 trillion in AI infrastructure since mid-2025, much of which loops back to NVIDIA through direct investments and indirect chip purchases by partners such as Oracle and CoreWeave.
Proponents, including CoreWeave CEO Mike Intrator, insist there is ‘nothing circular’ about these transactions, arguing that hyperscalers and AI labs are simply meeting explosive compute demand with locked-in supply. Critics counter that the money trail often circles back to NVIDIA itself, artificially propping up sales figures and echoing the vendor-financed bubble of the early 2000s. Time will tell which view proves correct.
Is NVIDIA a buy or a sell?
NVIDIA has a TipRanks Smart Score of ‘9 outperform’ and is rated as a ‘strong buy’ by analysts, with 37 ‘buy’, 1 ‘hold’ and 1 ‘sell’ recommendation as of 11 November 2025.
NVIDIA TipRanks smart score
