Nvidia CEO Jensen Huang on Wednesday defended the chipmaker’s growing role in financing the artificial intelligence boom, pushing back on criticism that the company’s financial support for other AI companies is meant to inflate its top-line growth.
“I think they’re missing a very big point,” Huang said on CNBC’s “Mad Money,” shortly after the company released better-than-expected quarterly results.
“This is the first generation of startups that needed tens of billions of dollars to get funded,” Huang continued. “When was the last time anybody heard of a startup that needed billions of dollars to get off the ground and needed tens of billions of dollars to become profitable? That just never happened. But that’s really the nature of AI. The cost of building AI, the cost of deploying AI, it’s very capital intensive.”
Nvidia has become flush with cash from the AI boom, thanks to its status as the leading maker of the chips needed to power the large language models behind OpenAI’s ChatGPT and other similar applications. The company has used its windfall to invest in a number of companies across the AI ecosystem, ranging from model makers like OpenAI and Anthropic, to neocloud providers that rent Nvidia-powered computing capacity to customers.
However, Nvidia has increasingly used its balance-sheet strength to provide financial backstops for data center projects, including $105 billion for a massive compute campus under construction in Ohio where OpenAI will be the tenant. Nvidia also recently announced a partnership with some of Wall Street’s biggest firms to arrange up to $500 billion in financing for data centers.
The latest wave of deals, in particular, has intensified concerns about Nvidia’s financial support for the AI ecosystem. Detractors say the support increasingly looks like “circular financing” and made comparisons to ill-fated financing arrangements from the dot-com bubble. In so-called circular deals, a company provides financing to customers that then use some of that money to buy its products, raising questions about whether the arrangements are artificially supporting demand and sales.
In the interview with CNBC’s Jim Cramer, Huang argued those arrangements reflect the unprecedented amount of capital required to build frontier AI companies. The CEO said Nvidia wants to be both equity investors in these leading AI companies, while providing broader support when necessary.
“There are several companies, these frontier AI labs, that are once-in-a-generation companies, and we want to be investors in them. We want to support them. We want to be a partner to them. We would love for them to build their ecosystem on top of us, of course, and then scale up their business along with us. And so, the opportunity to invest in them in the beginning was a great opportunity.”
At the same time, Huang said these companies don’t have the financial profiles to borrow additional money needed to secure compute at this stage of the AI buildout. “They’re not investment grade. They don’t have the track record, the capital track record, the financial track record, to be able to capture or secure capital at a low cost. And this is where Nvidia could be helpful,” Huang said.
Huang also pushed back against concerns that Nvidia could be left on the hook if one of those companies struggles. He argued the company’s computing infrastructure can be redeployed across different customers and workloads, limiting its exposure to any single investment.
“The money we’ve invested is going to generate tremendous returns,” he added. “I think the risk is low.”
Nvidia’s latest results on Wednesday reinforced Huang’s confidence in the underlying demand. For its fiscal 2027 second quarter, the company reported $96.2 billion in quarterly revenue, more than double a year earlier, while data center revenue climbed 117% to $89 billion. Nvidia also projected roughly 70% revenue growth in fiscal 2028.
Shares of Nvidia rose about 4% in extended trading following the results. The stock has gained just 12% this year, reflecting broader investor concerns around the AI trade.
