Key Highlights

  • Nvidia's Private Equity stakes stood at USD 47.9 billion on July 26, up from USD 3.8 billion.
  • Guarantees capped at USD 105 billion support financing for an Ohio Data Center tied to an OpenAI-affiliated company.
  • Nvidia agreed in September to acquire Hugging Face for USD 12.9 billion, and licensed Groq's technology last December.
  • Huang resigned on Nov. 12, and Nvidia said it expects operations and customer commitments to continue without interruption.

A Patron Leaves the Stage

Jensen Huang spent years building Nvidia (NASDAQ:NVDA) into more than a chipmaker. The company funds startups, backs customers and guarantees some of the financing that lets data center builders sign contracts for chips and power. Huang resigned as chief executive and director on Nov. 12, and Chief Financial Officer Colette Kress became interim chief executive while the board searches for a permanent successor.

Harvey C. Jones, named the company's first board chair, said the board has full confidence in Kress and the Leadership team and that it expects operations, customer commitments and the product roadmap to continue without interruption. The question for the companies on the receiving end of Nvidia's money is how the next leadership approaches the deals Huang started.

The Scale of Nvidia's Backing

Nvidia's quarterly filing for the period ended July 26 puts numbers on the strategy. Privately held non-marketable equity securities stood at USD 47.9 billion, up from USD 3.8 billion a year earlier. Publicly held equity securities were USD 47.7 billion, and a report on the filing put total equity investments at about USD 99 billion across AI model makers, infrastructure financiers and other private companies. The filing also lists USD 25 billion of equity Investment commitments, subject to specified contingencies.

The commitments go beyond equity. Nvidia disclosed guarantees capped at a total of USD 105 billion for SB Energy, covering Lease financing for a data center project in Pike County, Ohio, that is tied to about 4.25 gigawatts of computing load and to an OpenAI-affiliated company. Another USD 3.5 billion of maximum exposure covers land, power and shell guarantees for AI cloud projects, bringing total maximum gross exposure from guarantees to USD 108.5 billion. The filing also records USD 36 billion of AI cloud agreements and USD 25 billion of data center leases that have not yet started, of which USD 20 billion are for third parties.

Deals and Windfalls

The strategy has also produced acquisitions. In December, Nvidia struck a deal to license the technology of chip startup Groq and hire its founder and other executives, in a transaction reported at about USD 20 billion, while Groq stayed independent. In September, Nvidia agreed to acquire Hugging Face, the platform where developers share and test AI models, for USD 12.9 billion. The price covers about USD 11.9 billion for Hugging Face investors and up to USD 1 billion in stock-based incentives for employees who join. Huang said at the time that Hugging Face would remain an open platform for the AI ecosystem.

Nvidia also runs Inception, a program for startups that offers technical support and resources.

How the Web of Deals Works

The guarantees matter because of how they are used. A lease guarantee lets a young data center company that would struggle to borrow on its own sign a contract for computing capacity, and the guarantee can in turn support the borrowing used to buy chips. Arrangements in which a supplier finances customers who then spend on its products have drawn the label circular financing, and the phrase has become common for AI deals that link chipmakers, model developers and data center operators.

The filing's figures show how large that web has grown in a year. Private stakes rose roughly twelvefold, from USD 3.8 billion to USD 47.9 billion, and total guarantee exposure now exceeds USD 100 billion.

The Reasons for Watching Now

Huang's exit follows reports about his dealings with a former executive of Megaspeed, a Singapore company that buys Nvidia chips, whom US intelligence agencies reportedly believe worked for China. Nvidia's board opened an independent inquiry on Nov. 8 and said it had no reason to believe national security or company secrets were compromised. Three House committee chairs have asked Huang for a closed-door briefing on Nov. 18, the day after Nvidia reports third-quarter results.

What Startups and Backers Are Weighing

The people who depend on Nvidia face three linked questions. The first is funding, since the equity stakes and guarantees make Nvidia a source of Capital for companies with few alternatives, and the largest exposure is concentrated in one Ohio project. The second is access, because chips and cloud capacity for smaller companies have depended on Nvidia programs and relationships. The third is the pipeline of deals, including the contingent USD 25 billion of equity commitments and the Hugging Face acquisition, which the next chief executive inherits.

Several readings show how the arrangement continues. The Nov. 17 Earnings report and next quarterly filing update the size of the stakes, guarantees and commitments. The board's choice of a permanent chief executive and any change to the guarantee program show whether Nvidia keeps financing its customers on the same scale, and the status of the Ohio project shows how the largest guarantee performs.