WSJ: Nvidia Was in Talks to Guarantee Billions for Chip Buyers, Including Deals Led by Huang's Son in Law
馃毃 Another major scandal is coming out of NVIDIA. And this one has nothing to do with Jensen Huang's affairs. According to a Wall Street Journal report, Nvidia was offering billions in financial guarantees to AI companies that could not afford its chips, so they could keep
Context
The report puts Nvidia's customer financing, a key support for AI data center buildouts, under scrutiny as interim CEO Colette Kress takes over.
The Wall Street Journal published a report on the evening of November 12, Eastern time, headlined "Before His Ouster, Jensen Huang Belittled the Executive Replacing Him." It describes Nvidia's financing deals and Huang's view of Colette Kress, who became interim CEO when he resigned. Bull Theory's viral post on November 13 summarized the report and paired it with a second clipping on Wall Street's AI financing plans.
Deep dive
According to the Journal, Huang summoned Kress and his senior finance team this summer to diagnose a growing problem: Nvidia was in talks to provide billions of dollars of guarantees to companies that could not afford its chips. The paper says that included deals led by Huang's son in law, Nico Caprez, who had been offering upstart cloud providers and data center developers financing in the hope of turning them into long term customers.
The Journal reports that in the spring, Caprez and vice president Raj Mirpuri told prospective partners that Nvidia could arrange credit support deals within a couple of weeks, that dozens of companies lined up, and that Nvidia proposed cloud providers share a cut of their revenue in exchange. Kress raised questions about which deals to pursue, how to value the guarantees and how to calculate returns, a person familiar with the matter told the paper.
During an August meeting, the Journal says, Huang called Kress "a deer in the headlights" and a "reporting CFO," not someone who could help define strategy.
Bull Theory's post also showed a clipping headlined "Jensen Huang's Nvidia exit casts shadow over Wall Street's $500 billion AI financing bet," which describes preliminary agreements involving Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to finance data centers and chip factories with Nvidia chips as collateral. The post does not name the outlet for that clipping. Separately, unusual_whales quoted Reuters as reporting that Kress spent years as the one Nvidia executive willing to check Huang's riskier ambitions.
What to expect next
Watch whether Nvidia discloses the size of its guarantee and credit support commitments when it reports third quarter results on November 17, and whether Kress changes the program now that she leads the company. Lenders and investors behind the AI financing deals described in the clippings may also respond. No Nvidia response to the Journal's account appeared in the posts scanned, so the details rest on the paper's unnamed sources for now.