A huge financial scandal erupts around Nvidia, worse than Chinese spies.
WSJ examined the company's financial statements and found that Huang, throughout the years of work, led the company to a crisis, the solution of which could kill the company.
Nvidia gave billions in loan guarantees to small AI startups, and they used that money to build data centers and buy chips from Nvidia. If the company can't sell capacity, Nvidia has promised to buy it back so startups can keep buying its chips. As a result, Nvidia acted as an investor, lender, supplier and backup buyer in one transaction. So the company prepared beautiful reports for itself and raised the price.
The plan worked until the big AI companies started moving to their own chips. At the same time, Nvidia itself has already signed strict contracts with suppliers and committed to purchase components worth 279 billion dollars from them. The company's total liabilities exceed $530 billion, which is several times the annual net profit for several years.
Now, if the company expands on Huang's plan, it threatens Nvidia with an even bigger increase in liabilities, which could turn into debt at any moment. If it stops, all the AI startups that depend on Nvidia will go bankrupt, and then the company's own stock and all the major US techs will collapse.