Nvidia’s stock has soared as the market for the core chips powering large AI data centers exploded.
Nvidia, the dominant supplier of AI-computing infrastructure, authorized a record
on Monday, bringing its total repurchase capacity to $235 billion through fiscal year 2028, the largest in corporate history.
The move comes as the AI boom faces a harsh reality: Nvidia, the giant that designs the high-performance chips, GPUs, servers and software used to operate
, is the only company in the ecosystem making real monetary gains.
, Nvidia reported $96.2 billion in revenue, up 106% year over year, and returned roughly $26 billion to shareholders through repurchases and dividends. Nvidia CEO Jensen Huang is
Meanwhile, the AI startups and labs buying its compute still can’t prove to investors that they can generate standalone revenue. Even the biggest spenders outside Nvidia — the so-called AI hyperscalers — are facing
$300 billion of direct bond issuance expected in 2026
tracks across most major AI companies the cumulative monthly spend versus revenue. The one-developer dashboard tries to answer one question: “Has the AI industry, as a whole, made back the money it’s poured into AI so far?” The answer is no.
“AI startups are burning through investor cash and handing it straight to Nvidia to buy chips, even though the startups themselves aren’t making a profit,” said
, a Financial Times reporter and author of the upcoming book, A Fabulous Debt, about the history of the bond market.
Not only do those profits seem distant, but there’s a lot of circularity within the AI ecosystem, Wigglesworth said. Circularity means that capital is being recycled among the same small group of companies that act as one another’s investors, customers, suppliers, lenders and backstops.
Nvidia, with the most advantaged economic position in the supply chain, is at the top few cashing in. Because it sells the metaphorical picks and shovels in the metaphorical AI gold rush, it’s paid whenever any platform, startup or enterprise models build or upgrade AI capacity — even before any of them demonstrate whether they can cover the cost.
Buybacks calm nervous investors as AI safety fears mount
Nvidia’s authorized buyback is, first and foremost, a confidence operation. Its board is signaling to Wall Street that it expects cash flows to stay robust even as stories about an AI bubble and potential business-model threats seem to multiply.
The move is “an attempt to calm very nervous investors around AI,” said
Zitron pointed out that Nvidia merely greenlighting a buyback is not a legal agreement. It doesn’t mean Nvidia is committed to buying that many shares, or any shares at all, for that matter. The company has made big promises before, like building a
to prevent autonomous artificial intelligence agents from
in a rogue-like fashion, saying that the (timely) open-source system has guardrails to prevent past security failures.
According to Paris Marx, tech critic and host of the podcast
, Nvidia’s new AI security system is designed “to take advantage of the current discourse around AI threats to get some positive headlines,” even if the platform never ends up becoming an important part of the industry or a major revenue driver. By addressing
, which are now entering the mainstream, the chipmaker is protecting its own boom and ensuring market demand doesn’t collapse.
In other words, the company is both selling the picks and shovels and positioning itself as the sheriff who will keep the gold rush from turning into a riot.
“Launching something to ameliorate the dangers of rogue AI — or at least being seen to be ameliorating that risk — therefore makes sense, to keep the show on the road,” Wigglesworth told CNET.
AI profit figures current to September 2026. Nvidia is far out in the green, while the majority are in the red.
By committing to buy back stock instead of deploying that capital into more AI startups, Nvidia is effectively saying it has better uses for its cash.
“The more money that Nvidia sinks into startups, the less faith it has in their ongoing health,” Zitron said. “Jensen is doing these investments to keep the ecosystem alive so that people keep buying GPUs.”
This dynamic echoes the vendor-financing schemes of the late-1990s dot-com boom, when equipment providers funded service providers to buy their gear, many of which later went bankrupt.
“In the internet boom of 1997-2000, this activity was called vendor financing as equipment providers funded service providers to purchase their equipment,” said
, economist and professor emeritus of economics at the University of Massachusetts. “Many of them subsequently went bankrupt. This time the funding is on a vastly increased scale.”
The buyback keeps the “fear of missing out” AI narrative alive, even as its actual financial foundation weakens.
Nvidia CEO Jensen Huang is the world’s eighth-richest person.
Wealthy shareholders win, and everyday investors get scraps