Nvidia's AI Boom Sparks Concerns of Japan-Style Bubble

Nvidia's recent record-breaking quarter has sparked concerns among some experts about the company's valuation and its increasingly complex relationships with customers.

In a Foreign Policy column, Howard W. French, a former New York Times Tokyo bureau chief who covered Japan's economic bubble in the late 1980s, warns that Nvidia's financing structure resembles corporate Japan at the time.

Nvidia has seen its revenue soar 106% to $96.2 billion, and its profit more than double to $59.7 billion, but French is less concerned about the company's valuation itself, which he notes is roughly a third of Tokyo's multiple in December 1989.

The worry, according to French, lies in Nvidia's intertwined relationships with customers, particularly those in the AI sector.