Deep dive on Nvidia circular funding
3 days ago
- #Oracle
- #NVIDIA
- #OpenAI
- NVIDIA's Q3 Fiscal 2026 earnings show a 62% revenue increase to $57 billion, but underlying financials reveal potential red flags like a $8 billion gap between net income and operating cash flow.
- Inventory has nearly doubled to $19.8 billion, possibly indicating a capital drag, and Days Sales Outstanding (DSO) has increased to 53 days, suggesting extended credit terms to clients.
- Michael Burry and others highlight 'circular financing' concerns involving NVIDIA, OpenAI, and Oracle, with deals that may make revenue recognition appear fragile.
- OpenAI is reducing dependency on NVIDIA by purchasing DRAM wafers directly from Samsung and SK Hynix and hiring key silicon talent, signaling a move toward custom hardware.
- Oracle could benefit from acquiring Groq, a startup offering faster and cheaper inference solutions, bypassing NVIDIA's supply chain and HBM shortages.
- The AI hardware market dynamics between NVIDIA, OpenAI, and Oracle suggest intense competition and strategic maneuvering, with potential regulatory scrutiny over financial practices.