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Veteran investor Michael Burry has questioned reports that NVIDIA is considering providing a $250 billion financial guarantee to support OpenAI’s massive data center project, arguing that the structure reflects the same risks analysts have been warning about in the AI investment boom.
According to a Wall Street Journal report, NVIDIA is in talks to back financing for a 10-gigawatt AI campus being developed by SoftBank’s SB Energy in Ohio. The guarantee would help OpenAI lease the facility despite the company not having an investment-grade credit rating. The project, including AI chips and supporting infrastructure, could eventually cost more than $500 billion.
Burry, best known for predicting the 2008 financial crisis, criticized what he described as ‘circular financing’ in the AI sector. His concern centers on companies effectively financing the infrastructure needed to buy their own products, creating layers of financial dependence rather than demand driven by sustainable profits.
The issue has increasingly become a talking point among analysts, who argue that mega AI projects rely on complex financing arrangements while many AI firms, including OpenAI, continue to operate without consistent profitability. Critics say the model could become vulnerable if AI demand slows or capital becomes more expensive.
Such a deal would represent yet another move by NVIDIA towards being an integral part of the artificial intelligence environment. In addition to its work with graphics processors, NVIDIA has spent around $30 billion on OpenAI. It is also said to be considering providing money for chip purchases of up to $350 billion.
This guarantee is likely to facilitate borrowing on more favorable terms for SoftBank and ensure continued demand for NVIDIA’s AI hardware. Nevertheless, the talks are still going on, and nothing definite has been agreed on yet.
The criticism from Burry is set against the background of growing investor scrutiny as to whether such massive spending in AI would result in sustainable profits. Such massive capital outlays in computing power have been driving NVIDIA’s growth. Still, they have also raised fears about the company’s increasing debt, customer concentration, and the sustainability of its financing system.
Supporters claim that demand for AI computing will grow even more in the future. At the same time, skeptics warn that such dependence on massive investment commitments might pose dangers to the industry and its investors.
