Nvidia’s expanding artificial intelligence investments raise market stability concerns

Nvidia has committed $3 billion to Meta’s share sale, expanding its portfolio of investments in the artificial intelligence boom. The chip giant’s deals, loans, and guarantees have helped sustain demand for its processors, making it the most valuable company by market capitalization. Nvidia has invested in AI developers like OpenAI, Anthropic, and Elon Musk’s xAI, as well as neocloud companies such as CoreWeave and Nebius.

The company’s investments extend beyond the U.S., with support for European AI developers Mistral and British self-driving startup Wayve, as well as a partnership with South Korea’s SK Group for data centers.

Experts suggest Nvidia’s substantial profits make it more inclined to channel funds towards infrastructure investments tied to its equipment, rather than running its own data centers, which could lead to competition with its biggest customers and potential antitrust issues. Nvidia’s CEO, Jensen Huang, defends the strategy, arguing that frontier AI labs require significant funding to get started.

Critics, however, liken Nvidia's investments to the dot-com era, where companies inflated their growth by investing in startups that later purchased their products.

The main concern is the concentration of Nvidia's investments, with two direct customers accounting for 22 percent and 14 percent of its revenue in the 2026 fiscal year. If AI demand disappoints, spending cuts could impact chipmakers, data-center builders, and their financiers simultaneously. Shares of several Nvidia-linked neocloud companies fell by at least 30 percent in October, as investors worry about tighter credit for AI projects.

Despite these concerns, experts believe the market for AI chips remains limited by supply, with demand expected to continue growing for the next 12 to 18 months.