Wall Street’s latest concern about Nvidia Corp (NASDAQ:NVDA) isn’t its valuation or AI demand—it’s whether the chipmaker is financing its own growth.
Nvidia announced on Monday it will invest $3.5 billion in convertible bonds issued by Taiwanese chip designer MediaTek, deepening a partnership spanning AI infrastructure, AI PCs and automotive computing and expanding their NVLink Fusion collaboration, which lets MediaTek help customers build custom AI chips that plug into Nvidia’s rack-scale systems.
The deal reignites the “circular financing” debate, but some investors argue critics are overlooking a key distinction: building an ecosystem isn’t the same as manufacturing demand.
The investment comes just days after Nvidia faced renewed scrutiny over a series of financing initiatives, including backing AI infrastructure projects and extending financial support across its ecosystem.
Critics argue these arrangements risk creating a feedback loop in which Nvidia finances companies that ultimately become buyers of its own technology—a practice increasingly described as “circular financing.”
