We watched it happen in real time this morning. Nvidia’s stock climbed past $5 trillion in market capitalization, making it the first company in human history to hit that benchmark. Jensen Huang, the leather-jacket-wearing prophet of silicon, now sits atop a mountain of valuation that exceeds the GDP of every country on Earth except the United States and China.
Let that sink in for a moment. One company designing graphics chips is now worth more than the entire economic output of Japan, Germany, India, or the United Kingdom.
And yet, as champagne corks presumably popped in Santa Clara this morning, a different conversation was happening in hushed tones across trading floors and analyst calls. The word nobody wants to say out loud but everyone is thinking comes in six letters and starts with B.
Bubble.
The Circular Money Machine That Has Everyone Spooked
Here’s where things get weird, and we mean dotcom-era, Enron-adjacent, “wait, how does this actually work” kind of weird.
In September, Nvidia announced it would invest up to $100 billion in OpenAI to help the ChatGPT maker fund a massive data center buildout. Noble enough, right? Except here’s the kicker. OpenAI will use that $100 billion to buy millions of Nvidia chips to fill those data centers.
Read that again. Nvidia gives OpenAI $100 billion. OpenAI turns around and spends a huge chunk of that buying Nvidia’s products. Wall Street research firm NewStreet Research estimated that for every $10 billion Nvidia invests in OpenAI, it will see $35 billion worth of GPU purchases or lease payments.
It’s not just OpenAI. Nvidia has invested in CoreWeave, which provides AI infrastructure to OpenAI using Nvidia chips. Oracle is buying $40 billion worth of Nvidia chips to build data centers for OpenAI. SoftBank, which has a $3 billion stake in Nvidia, is also partnering with Oracle and OpenAI on the $500 billion Stargate project.
If your head is spinning trying to follow the money, you’re not alone. The AI boom has become increasingly fueled by just a handful of companies turning to one another for vast amounts of capital and computing power, creating what some analysts describe as a mirage of growth.
“Nvidia to pay OpenAI so they can get paid by SoftBank so they can pay Oracle to pay Nvidia,” CNBC’s Steve Kovach joked on Bluesky, but the underlying concern isn’t funny at all.
The Ghost of Lucent Technologies Haunts Silicon Valley
During the dotcom boom, vendor financing arrangements where companies funded their own customers were key to the demise of Lucent, once the world’s biggest telecom equipment company billed as a “picks and shovels” play in the emerging tech economy. Lucent barely avoided bankruptcy in 2002 and was sold to a French competitor for pennies on the dollar.
Sound familiar?
Companies like fiber-optic giant Global Crossing engaged in “revenue roundtripping,” cutting deals where they paid money to another company for services, and then that company agreed to purchase equipment of exactly equal value, often at the end of a quarter to hit topline forecasts. When the bubble burst, Global Crossing went bankrupt, and its executives paid large legal settlements.
Brad Goldberg, a Seaport Global analyst, said Nvidia’s deals had a whiff of circular financing and were emblematic of “bubble-like behavior”. Stacy Rasgon at Bernstein Research wrote that the OpenAI investment would “clearly fuel circular concerns.”
Even Julien Garran of MacroStrategy Partnership estimated that “misallocation of capital in the US” led by AI is 17 times bigger than the dotcom bubble and four times bigger than the 2008 real estate bubble.
Seventeen times bigger. Let that number marinate while you consider whether your retirement fund is overweight in tech stocks.
But Wait, There’s Actually Real Money Here
Before we declare this the apocalypse and start shorting everything with a GPU in it, let’s pump the brakes and acknowledge what’s actually happening on the ground.
On Tuesday, Jensen Huang announced $500 billion in AI chip orders and plans to build seven supercomputers for the U.S. government. That’s not Monopoly money or speculative futures. Those are actual government contracts.
Nvidia announced partnerships with Uber on robotaxis, a $1 billion investment in Nokia for 6G technology development, and collaborations with Palantir and Oracle spanning telecommunications, automotive, healthcare, and robotics.
The company’s H100 and Blackwell processors genuinely power most large language models behind tools people actually use every day, from ChatGPT to Elon Musk’s xAI platform. Apple and Microsoft have also crossed $4 trillion in market value recently, suggesting this isn’t just Nvidia riding a one-company hype cycle.
When asked about bubble concerns, Huang told NBC News that “these companies are generating real revenues” and the products they’re selling are “profitable.” Morgan Stanley analysts noted that Big Tech companies today are in much stronger financial positions than the over-inflated stocks of the dotcom era.
The Trillion-Dollar Question Nobody Can Answer
Here’s what keeps us up at night. Microsoft, Alphabet, Amazon, and Meta are expected to spend $400 billion on AI infrastructure this year alone, but returns for businesses adopting the technology remain uncertain.
Matthew Tuttle, CEO of Tuttle Capital Management, put it bluntly in a statement we can’t stop thinking about. “AI’s current expansion relies on a few dominant players financing each other’s capacity. The moment investors start demanding cash-flow returns instead of capacity announcements, some of these flywheels could seize”.
That’s the nightmare scenario. What happens when the music stops? What happens when shareholders start asking “okay, but when do we actually see profit from all this spending?”
A recent Bain & Company report found that AI companies will need $2 trillion of annual revenue to fund the infrastructure needed to meet projected demand for AI by 2030, creating an $800 billion shortfall.
Meanwhile, in Saskatchewan, a Plot Twist
While Wall Street debates whether we’re witnessing genius or collective delusion, something curious is happening in Moose Jaw, Saskatchewan. We recently reported on Carpere Valley’s $485 million AI data centre project, which aims to transform a former mental health facility into Canada’s first AI health town with a 150-megawatt data centre.
The Saskatchewan project highlights a fascinating counternarrative to the circular financing concerns. Moose Jaw’s colder climate naturally reduces cooling costs, which typically consume 35% of AI data centre operational budgets. The project leverages waste heat from computing to power greenhouse agriculture. It’s self-financed rather than venture-backed.
In other words, while the trillion-dollar tech giants are playing musical chairs with each other’s capital, smaller players are building infrastructure that actually makes thermodynamic sense. The question is whether projects like Moose Jaw represent the sustainable future of AI infrastructure or whether they’ll get steamrolled when the hyperscale players inevitably consolidate the market.
Jensen Huang’s $177 Billion Payday and the Geopolitical Chess Game
Let’s talk about the man himself for a moment. At current prices, Jensen Huang’s stake in Nvidia would be worth about $177.4 billion, making him the world’s eighth-richest person.
Born in Taiwan and raised in the United States from age nine, Huang has led Nvidia since founding it in 1993. His transformation of a niche gaming chip company into the backbone of the global AI economy is genuinely remarkable, regardless of how this story ends.
But here’s where things get geopolitically spicy. President Donald Trump is expected to discuss Nvidia’s Blackwell chip with Chinese President Xi Jinping on Thursday, with sales of the high-end chip being a key sticking point in trade talks due to Washington’s export controls.
Commerce Secretary Howard Lutnick told CNBC that America doesn’t sell China “our best stuff, not our second best stuff, not even our third best,” but selling them the “fourth best” AI technology was “cool” with the administration.
Nvidia’s chips have become pawns in a much larger game between the world’s two superpowers. U.S. export curbs on advanced chips have made Nvidia a key piece of Washington’s geopolitical strategy to limit China’s access to cutting-edge AI hardware.
The Big Tech Arms Race That’s Reshaping Everything
Step back and look at the bigger picture for a moment. The circular spending spree, paired with the industry’s eye-popping growth rates and lack of clarity around return on AI investments, has raised serious concerns.
Since ChatGPT launched in November 2022, Nvidia’s shares have climbed twelvefold. The company went from $1 trillion to $2 trillion to $3 trillion to $4 trillion, and now $5 trillion in less than three years. The stock has gained more than 50% in 2025 alone and is up 1,500% over the last five years.
Both the Bank of England and the International Monetary Fund have raised alarms about tech stock prices pumped up by the AI boom potentially bursting.
Yet here’s the paradox. Matt Britzman, senior equity analyst at Hargreaves Lansdown, said “Nvidia hitting a $5 trillion market cap is more than a milestone, it’s a statement, as Nvidia has gone from chip maker to industry creator. The market continues to underestimate the scale of the opportunity, and Nvidia remains one of the best ways to play the AI theme”.
So What Happens Next?
We genuinely don’t know, and neither does anyone else pretending they do.
The optimistic case goes like this. AI is genuinely transformational technology. The infrastructure being built today will power economic growth for decades. Nvidia is positioned at the center of a multi-trillion dollar secular shift in how humans and machines interact. The circular deals are just sophisticated corporate finance strategies to accelerate deployment of world-changing technology. In 10 years, we’ll look back at the bubble concerns and laugh at the doubters, just like we do with early Amazon skeptics.
The pessimistic case is darker. We’re watching a spectacular misallocation of capital where a handful of companies are essentially financing their own demand. Returns on AI investment will disappoint. Someone will miss an earnings target or downgrade forward guidance. The circular financing arrangements will unravel. Nvidia’s stock will crater. The dominoes will fall. Pension funds will get hammered. We’ll make documentaries about “The AI Bubble of 2025” and wonder how we all got so swept up in the hype.
The realistic case probably falls somewhere in between. AI is real and transformational, but valuations have gotten ahead of fundamentals. There will be a correction at some point. Not everyone betting on AI will win. But the technology itself will continue advancing, and the companies with genuine moats and sustainable business models will emerge stronger.
The Verdict From Our Desk
Look, we cover AI for a living. We’re believers in the technology’s potential to reshape virtually every industry. We’ve seen the demos, talked to the researchers, and watched the progress accelerate at breathtaking speed.
But $5 trillion is an incomprehensibly large number. When the first company in history hits that valuation primarily on the promise of future AI growth, powered by a complex web of interconnected deals where the same handful of companies keep writing checks to each other, alarm bells should ring.
Nvidia is due to report quarterly results on November 19. That earnings call will be one of the most scrutinized in corporate history. If Nvidia delivers strong results and optimistic guidance, the rally continues and the bubble concerns fade. If there’s even a whiff of disappointment, buckle up.
We’re not making predictions. We’re just watching history unfold in real time and trying to make sense of whether we’re witnessing the birth of a new economic era or the inflation of the biggest financial bubble the world has ever seen.
The truth is probably both.
Stay tuned. This ride is just getting started.
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Disclosure: AImagazine.ca maintains editorial independence. No positions in any stocks mentioned. This article is for informational purposes only and does not constitute investment advice.
