Nvidia is playing many parts in the AI gold rush, a top business guru says

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Nvidia CEO Jensen Huang. Bloomberg/Bloomberg via Getty Images

Nvidia is playing many positions on the AI pitch, a leading business professor says.

"If AI is a modern-day gold rush, then Nvidia is not only selling the picks; they're also shareholders in the mines themselves, and now they're becoming the bank that's lending to all the prospectors," Rob Lalka told Business Insider in an email.

Lalka, a business professor at Tulane University and the author of "The Venture Alchemists: How Big Tech Turned Profits into Power," described Nvidia's meteoric rise over the past two decades, from making graphics cards for video games to becoming the world's most valuable company and the linchpin of the AI boom.

Nvidia has invested or committed tens of billions of dollars to OpenAI, Anthropic, and xAI, and has equity stakes in scores of AI startups that buy its hardware, Lalka said.

The chipmaker also holds stakes in data center specialists that need its processors, such as CoreWeave and Nebius, he continued.

Lalka highlighted Nvidia's latest financing agreement with some of Wall Street's biggest names, including Apollo and KKR, to raise $500 billion for AI infrastructure built around Nvidia chips.

Nvidia did not immediately respond to a request for comment.

Nvidia's web of deals has made it the beating heart of the AI boom, as it sells the semiconductors that power the technology, and invests in and finances the array of companies buying its chips.

Several high-profile commentators have warned that the AI ecosystem's reliance on Nvidia could cause problems.

Mark Cuban, the tech billionaire of "Shark Tank" fame, recently posted on X that Nvidia is playing a similar role to the IPO market during the dot-com boom as it's "funding everyone and anyone."

"One breakthrough in another chip provider, or a misstep, and it all could crumble," Cuban added. "It's truly scary."

Michael Burry, the investor of "The Big Short" fame who called the subprime mortgage crisis, has used the same analogy as Lalka.

He wrote in November that, like Cisco during the dot-com boom, Nvidia was "at the center of it all, with the picks and shovels for all and the expansive vision to go with it."

Burry recently posted on X that Nvidia is "overreaching" as it hustles to push circular spending to "biblical proportions."

Nvidia CEO Jensen Huang has acknowledged just how reliant the AI boom and the global economy are on his company's success. Describing online memes on the topic in November, he said: "We're basically holding the planet together — and it's not untrue."

Nvidia has broadly met sky-high expectations so far. It grew revenue by 85% year-on-year to about $82 billion in the three months ended April 26, fueling a 211% surge in net income to $58 billion.

Theron Mohamed is a London-based correspondent on the International team at Business Insider. His coverage spans finance, investing, wealth, markets, and the economy.Theron joined BI in 2019 as a reporter at Markets Insider and rose to the rank of correspondent before moving to the Trending team then the broader International team. He previously covered tech, media, and telecom stocks for Investors Chronicle magazine and had a brief stint on the Financial Times' Data team. He interned at the Wall Street Journal in New York where he primarily wrote for Heard on the Street.Theron has freelanced for The Independent, The Telegraph, WIRED, and several smaller publications. He holds an undergraduate degree in geography from the London School of Economics, and a master's degree in journalism from Columbia University.Theron often covers Warren Buffett, Michael Burry, and other elite investors. He also writes about the world's wealthiest people and shares financial advice from all manner of rich and successful people.Email Theron at [email protected] and follow him on X @theron_mohamed.