Nvidia’s $750 Billion Question: Can the Chip Giant Finance Its Own Revolution Without Breaking?

Nvidia shares dip 9% as $50B Hut 8 lease and $250B OpenAI guarantee raise concerns over circular vendor financing, echoing dot-com era risks.

The tension gripping Nvidia’s stock right now isn’t about chips. It’s about credit.

On one side sits a $50 billion data-center lease with Hut 8 in Texas, confirmed this week by the Financial Times. On the other, a reported $250 billion financing guarantee for OpenAI’s Ohio megaproject — and whispers that Nvidia’s total customer commitments may have ballooned to $750 billion. The result is a stock caught between a booming industrial story and mounting anxiety over how much of that boom is being financed by the company itself.

Shares closed Wednesday at €166.16, down 4.08% in a single session and 9.43% over seven trading days. That put the stock exactly on its 200-day moving average of €166.29 — a technical level that often determines whether a sell-off deepens or stabilizes. At €168.76 in Thursday trading, the stock had recovered 1.56%, but remains roughly 16% below its 52-week high of €202.50 from May.

The Hut 8 Deal That Wasn’t a Secret

The Texas lease is enormous by any measure. Hut 8’s Beacon Point campus, spread across 525 acres, carries a base contract value of $19.6 billion over 15 years, with extension options that could push the total to $50.2 billion. The miner-turned-data-center operator had previously disclosed only that the tenant was an “existing investment-grade customer.” This week’s FT report, citing five informed sources, identified Nvidia as the anchor lessee.

The facility follows Nvidia’s own DSX reference architecture for gigawatt-scale AI factories. Hut 8 expects the first phase to go live in the first quarter of 2027, with a second phase following in Q2 2028. The FT report suggests Nvidia may sublease space to its “Neocloud” partners — the firms that buy Nvidia’s chips and resell cloud computing services.

Nvidia hasn’t confirmed the deal directly. The company said only that it’s working with ecosystem partners to accelerate deployment of its DSX architecture — neither confirming nor denying the Hut 8 partnership.

Where the Real Anxiety Lives

The OpenAI guarantee is a different beast entirely. Reports indicate Nvidia has pledged $250 billion to back a 10-gigawatt data center in Ohio, effectively acting as the financier so OpenAI can buy the H200 chips and future Vera-Rubin systems that Nvidia itself sells. Some analysts estimate Nvidia’s total customer commitments across all such arrangements could reach $750 billion.

Critics call this circular financing. Market veterans draw uncomfortable parallels to the vendor-financing models of the dot-com era, when equipment makers lent their own customers the money to buy their products. The concern shows up in credit markets: the cost of insuring Nvidia’s debt against default has doubled to a record 82 basis points.

It’s a stark contrast with the operational picture. Suppliers like Advantest, Teradyne, and Lam Research all reported record revenues this week and raised guidance. Lam Research beat market expectations on revenue guidance by $1 billion, driven by unrelenting demand for AI wafer fabrication equipment.

Nvidia itself is feeling the physical constraints of its own growth. The company is adjusting the memory configuration of its upcoming Vera-Rubin systems because memory costs now account for nearly 29% of total system cost. Consumer graphics card prices have risen by as much as 30%. Yet enterprise demand for high-end AI infrastructure still exceeds available supply.

CEO Jensen Huang has publicly described the recent stock decline as a puzzle. The operational story remains strong; the financial architecture behind it is increasingly questioned.

A Sector-Wide Tremor

The broader chip sell-off that erased over $1 trillion in market value globally was triggered by SK Hynix. The Korean memory giant reported record quarterly revenue of 79.32 trillion won, up 257% year-over-year, with operating profit surging 557% to 60.54 trillion won. Both figures missed Wall Street expectations, sparking a rout across memory-chip stocks.

Nvidia alone lost roughly $238 billion in market value since Friday. SK Hynix, Samsung Electronics, and Micron collectively shed over $460 billion. Adding to the pressure: Chinese memory maker CXMT’s strong market debut and reports of progress in domestic chip fabrication technology.

Charlie Dai, an analyst at Forrester, frames the sell-off as a repricing of expectations rather than a collapse in AI demand. “It’s less about weakening AI demand than about a repricing of expectations after an exceptionally strong rally,” he said. Aberdeen Asset Management sees the decline as a buying opportunity, noting valuations have become more attractive.

The August 26 Reckoning

With a market capitalization of €4.18 trillion, Nvidia remains a technology heavyweight. The average analyst price target stands at €265.92, implying 60% upside from current levels — though that consensus was formed before the credit concerns intensified.

The relative strength index of 37.8 suggests the stock is approaching oversold territory. The annualized 30-day volatility of 36.47% reflects how jittery trading has become.

The next major catalyst comes August 26, when Nvidia reports fiscal second-quarter results for the year ending July 2027. The numbers will matter less for chip benchmarks than for a more fundamental question: Does the financial system Nvidia has built around its own customers hold up when growth rates inevitably normalize?

Microsoft’s strong quarterly report this week, with capital expenditure guidance well above last year’s levels, offered one encouraging signal: hyperscaler AI investment hasn’t slowed yet. But the circular funding debate isn’t going away. For now, Nvidia’s stock is caught between a $50 billion lease that proves demand and a $250 billion guarantee that raises questions about how much of that demand is real.