High-profile investors Mark Cuban and Michael Burry raised severe concerns on July 29, 2026, regarding Nvidia Corp.
funding its customers' artificial intelligence chip purchases, warning that the practice creates dangerous market vulnerabilities reminiscent of the dot-com bubble.
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Shares of Nvidia traded down 2% on Wednesday, extending a decline that leaves the stock 18% below its peak from May.
Despite the recent drop, the company's valuation remains up roughly 13-fold since the start of 2023.
Critics point out that Nvidia has been financing the acquisition of its own graphics processing units for data center construction.
By providing backing to major AI developers, the chipmaker essentially subsidizes demand for its hardware, constructing what market observers call a circular spending loop.
Investor Warnings
Mark Cuban, tech billionaire and former investor on Shark Tank, voiced his alarm over the setup on social media platform X.
"This is so analogous to the dot com burst," said Cuban. "But instead of IPOs, Nvidia is the 'ipo,' funding everyone and anyone."
Major corporations including OpenAI, Microsoft, CoreWeave, and SK Hynix have committed hundreds of billions of dollars toward Nvidia technology.
Concerns persist that if these infrastructure investments fail to generate expected profits, Nvidia could face substantial fallout from non-paying clients.
"One breakthrough in another chip provider, or a misstep, and it all could crumble," said Cuban. "It's truly scary."
Cuban previously noted on a podcast that firms are erecting data centers that could quickly become obsolete, jokingly suggesting surplus facilities might be converted into pickleball courts.
