Nvidia’s AI Deal Machine Hits $24 Billion — and Raises Questions
Nvidia is accelerating its dealmaking at a breakneck pace, adding another multibillion-dollar partnership this week with Microsoft and Anthropic. The new agreement includes up to $10 billion in Nvidia funding for Anthropic, alongside $5 billion from Microsoft — in exchange for massive cloud and compute purchases back to those same firms.
PitchBook data shows Nvidia has already invested $23.7 billion in 59 AI-related deals this year, surpassing all of 2024 before December even begins. Since 2020, Nvidia has funneled more than $53 billion into 170 deals spanning the entire AI stack, from frontier model labs like OpenAI and Cohere to “neoclouds” such as CoreWeave and Lambda.
The strategy is clear: own the rails of the AI revolution — whether the customer is a Big Tech giant or an emerging AI-native cloud provider. But the aggressiveness of the approach is drawing scrutiny.
Circular Funding Concerns Grow
A growing number of analysts and institutional investors are raising concerns about circular investment loops, where Nvidia invests in a customer, and that customer, in turn, commits to buying billions of dollars in Nvidia GPUs and systems.
The Anthropic deal is a prime example:
- Nvidia and Microsoft invest billions into Anthropic.
- Anthropic commits to purchase $30B of Azure compute and up to 1 GW of Nvidia-powered systems.
- Nvidia collaborates with the startup to optimize model performance on Nvidia hardware.
Recent deals follow a similar pattern:
- $6.6B investment in OpenAI in October
- $6B investment in xAI in November
- A commitment to invest up to $100B into OpenAI over time
Critics argue this loop may blur the line between organic demand and demand created through financial engineering.
Some analysts warn that this kind of ecosystem funding — while potentially lucrative — can artificially inflate short-term demand signals, particularly at a time when Wall Street is increasingly concerned about an AI valuation bubble.
Why Nvidia’s Strategy Still Appeals to Bulls
Despite the criticism, many on Wall Street see Nvidia’s approach as a rational move to cement long-term dominance.
Nvidia’s position today sits uniquely at the intersection of:
- AI chip design
- AI datacenter infrastructure
- Cloud partnerships
- Equity ownership in the leading model developers
- Strategic control of next-generation GPU supply
Supporters argue that Nvidia is effectively locking in future demand, supporting the model developers shaping the next generation of AI, and building a moat that stretches across hardware, software, cloud, and capital markets.
The company’s past investments — including CoreWeave and other neocloud players — have already paid off as those firms became major GPU customers during the compute-scarcity boom.
Nvidia reports earnings Wednesday after the bell, and expectations remain sky-high. With the stock sharply sensitive to AI sentiment swings, investors will be looking closely for clarity on real demand versus demand linked to Nvidia’s balance sheet.
WSA Take
Nvidia is rewriting the playbook for strategic dominance in the AI era. But the scale and structure of its recent deals blur the traditional line between customer, partner, and investment target. That’s driving fresh debate on whether Nvidia is building a durable demand engine — or stepping into territory where financial engineering can distort true market signals.
Either way, its deal pipeline has become the clearest window into where the next phase of the AI arms race is headed.
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Wall Street Access does not work with or receive compensation from any public companies mentioned. Content is for informational and educational purposes only and is not investment advice.
