Nvidia deliberately kept GPU prices high through circular financing deals, report claims

A recent report has alleged that Nvidia deliberately kept GPU prices high through circular financing deals. The claim, based on a Wall Street Journal profile of interim CEO Colette Kress, suggests that the company's strategy was to finance its own customers to drive the AI boom despite an oversupply of TSMC wafers. This comes after former CEO Jensen Huang's resignation amid accusations of circular financing, which the tech giant has long been criticized for.

The report highlights how Nvidia pushed for more deals in mid-to-late 2026 to maintain high GPU prices, despite an oversupply of semiconductor manufacturing capacity. Kress expressed concern about the scale of the deals Nvidia had with cloud providers and major AI companies like OpenAI, but the company proceeded with financing deals that ultimately contributed to inflated GPU prices.

Prices for Nvidia's GeForce GPUs, particularly the flagship RTX 5090, have skyrocketed, often exceeding 160% of their original MSRP, as the company diverted VRAM and semiconductors towards data center GPUs. The strategy was driven by Nvidia's desire to sustain the AI boom and create a perception of high demand, as hinted at by Huang's story during a Berlin conference.

The report also notes Huang's resignation following multiple extramarital affairs, including one with Alice Huang, whose company was suspected of diverting Nvidia chips to China in violation of export regulations.