Even Goldman’s Delta-One Head Is Shocked At Nvidia’s Grotesque Vendor Financing Scheme

Yesterday when commenting on the latest vendor financing perpetual money scheme unveiled by Nvidia and OpenAi, according to which as part of its latest circus act, the world’s largest company will invest up to $100 billion in OpenAi so that Sam Altman’s company can splurge on various components, we said that tomorrow we would likely see the following press release:

tomorrow:

*OPENAI TO BUY $100B OF CHIPS FROM NVIDIA https://t.co/5zGxPwCIOi

— zerohedge (@zerohedge) September 22, 2025

We were of course referring to what has now become a running joke even among vendor financing fraud veterans..

so let me get this right:

Oracle says Openai committed $300B for cloud compute → oracle stock jumps 36% (best day since 1992)

Oracle runs on Nvidia GPUs → has to buy billions in chips from Nvidia

Nvidia just announced they’re investing $100B into openai

Openai uses that…

— Sully (@SullyOmarr) September 22, 2025

… namely the fact that so much of Nvidia’s revenue is the money it downstreams to its clients which then feeds Nvidia’s topline, usually with a 20-30x market cap multiplier, which then allows it to downstream even more money to clients, and so on in what has now become a real life version of the infamous infinite money glitch. 

The Circle of Life pic.twitter.com/cQrK9tww9P

— Kakashii (@kakashiii111) September 22, 2025

In retrospect, Nvidia’s increasingly grotesque vendor financing scheme is starting to shock not just us. 

Overnight, the venerable Australian Financial Review wrote “Nvidia’s OpenAI deal shows how worrying the AI money-go-round is”, arguing “One firm invests $100bn in the other, so it can buy $100bn of chips made by the investor. Welcome to artificial intelligence’s circular economy.” That said, as Rabobank’s Michael Every wrote this morning, history is replete with markets that see crossholdings work just like that, usually, but not exclusively, as part of economic statecraft.

Which is also true, but in the end of the day, vendor financing like this are nothing more than accounting magic and while not of the same severity (yet) as what led to the instant collapse of Enron over 20 years ago, the more people notice, the closer we get to the tipping point.

And more people are certainly noticing. Important people, such as Goldman’s head of Delta One trading, Rich Privorotsky, who dedicated an entire section to the Nvidia “transaction” in his morning note, titled appropriately enough, Circular reference?

Markets were largely sideways, led early by a resurgence in Apple, with the rest of the tape struggling to hold gains… until the Nvidia–OpenAI headline hit. Reuters reports a structure where Nvidia invests up to $100bn for non voting shares, and OpenAI uses the cash to buy Nvidia chips, with a plan to deploy of what could be at least 10GW of Nvidia systems.   NVDA ripped… TSMC +3%/rest of AI supply chain higher and Oracle popped on the read through that it likely builds a big chunk of the compute. 

Ok definitely not old enough to have been around trading during the tech bubble and multiples are nowhere near that point in time… That said, vendor financing was a feature of that era and when when the telecom equipment makers (Cisco, Lucent, Nortel, etc.) extended loans, equity investments, or credit guarantees to their customers who then used the cash/credit to buy back the equipment… well suffice it to say, it did not end well for anyone. 

And guess what, this time won’t be any different. The only question is when, and at the rate these stocks meltup every day (when they are not tumbling), it’s answer could mean the difference between a successful career in finance or ending up as a line cook in McDonalds.