Nvidia Finances Customers in Unprecedented $30 Billion Deal

Nvidia, the world's largest chipmaker, is breaking the traditional mold by directly financing its largest customers, a move that has sent ripples through Silicon Valley. On Thursday, Nvidia and SoftBank Group each wired a final $10 billion tranche to OpenAI, completing separate $30 billion commitments tied to the ChatGPT developer's latest funding round. This creates a unique circular flow of capital, where billions move from Nvidia to OpenAI and then back to Nvidia to pay for computing capacity powered by Nvidia's accelerator cards.

The company's influence extends beyond its financial might. Nvidia CEO Jensen Huang recently joined other industry leaders in a meeting with US President Donald Trump, where they signed an agreement on shared standards for artificial intelligence. This diplomatic involvement underscores Nvidia's growing role in shaping the future of AI technology and its integration into society and the economy.

Despite mounting legal challenges, including a trademark dispute and a patent infringement complaint, Nvidia's stock remains robust. The stock closed Friday at EUR 207.85, just 1.5% below its 52-week high. Morgan Stanley reaffirmed Nvidia as its top pick in the semiconductor sector, setting a $300 price target and highlighting the company's expanding revenue streams from specialized model developers, alternative cloud providers, enterprises, and government institutions.

Looking ahead, Morgan Stanley projects Nvidia's annual revenue to climb from about $216 billion in 2026 to roughly $406 billion in 2027, with the potential to reach $690 billion the following year. The bank also anticipates technological advancements, such as the Vera Rubin and Feynman platforms, to drive further growth. Additionally, Nvidia is exploring new financing models, like sale-and-leaseback arrangements, to help customers manage the cost of expensive hardware.