Where the demand for the whole chain is coming from or where the money is coming from becomes a really big issue," Tomic said.
The academic compared the situation to the inflated revenues seen prior to the 2000 technology crash.
"Companies would engage in circular financing deals where they would essentially buy from each other and make it look like there was greater demand for their services than there really was.
At some point, the money runs out," Tomic said.
He noted that true demand must come from end users rather than interconnected corporate balance sheets.
"In other words, the demand is not as big as it appears to be because the companies are buying from each other, using their own money to some degree, as opposed to OpenAI having tremendous customer demand, monetising it properly and then using customers’ money to buy Nvidia chips.
They’re essentially using Nvidia’s money to buy Nvidia chips," Tomic said.
Following the report, Nvidia shares fell more than 4 percent in Monday trading, reflecting broader investor anxiety regarding chipmaker exposure.
"If everything is so hunky-dory and everything is full steam ahead in the entire AI ecosystem, why is this kind of deal even needed?
I think that’s what’s giving the market jitters because the question is: Why is this necessary?
Why is Nvidia trying to juice up demand for its chips in this particular way?" Tomic said.
Market commentator Jim Cramer also cautioned investors on Monday, comparing the trend to the vendor financing that preceded the dot-com crash.
