Nvidia’s $24B AI deal blitz has Wall Street asking questions about ‘murky’ circular investments

Nvidia has accelerated dealmaking in AI, investing $23.7 billion across 59 deals so far in 2025 (vs. $22.8 billion across 54 deals in 2024) and totaling roughly $53 billion over 170 deals since 2020; its latest pact with Microsoft and Anthropic has Nvidia pledging up to $10 billion and Microsoft up to $5 billion while Anthropic commits to buy $30 billion of Azure compute and will co‑develop designs with Nvidia. The move follows big investments including $6.6 billion in OpenAI, $6 billion in xAI and a headline-grabbing up-to-$100 billion OpenAI commitment, underscoring Nvidia’s strategy to lock in customers for its GPUs but raising concerns about circular arrangements and conflicts with large cloud customers. Analysts and investors have flagged the deals as “very murky,” contributing to recent tech selloffs amid AI bubble fears and creating potential governance and valuation risks for Nvidia and its ecosystem partners.

Analysis

Nvidia has aggressively expanded its AI ecosystem footprint, investing $23.7 billion across 59 deals so far in 2025 versus $22.8 billion across 54 deals in 2024 and roughly $53 billion across 170 deals since 2020; the latest arrangement has Nvidia and Microsoft agreeing to invest up to $10 billion and $5 billion, respectively, in Anthropic while Anthropic commits to buy $30 billion of Azure compute and will co‑develop designs with Nvidia. Nvidia is the dominant supplier of GPUs critical to AI training and inference, and the company has followed recent large commitments including $6.6 billion to OpenAI, $6 billion to xAI and an announced up-to-$100 billion OpenAI commitment, signaling a strategy to lock in demand. Market participants and some analysts are flagging circularity and conflict risks in those investments — Seaport’s Jay Goldberg labeled the OpenAI deal “very murky” — and tech stocks have sold off amid AI bubble concerns. Sentiment and impact metrics reflect mixed but material market influence (NVDA sentiment -0.1, MSFT +0.6, market impact score 0.55), implying elevated short‑term volatility, governance scrutiny and potential antitrust/competitive tensions for Nvidia and its cloud partners.

Key Decisions for Investors

• Trim or hedge near‑term NVDA exposure given the $53 billion-plus investment footprint and rising concerns about circular deals and valuation risk, monitor Nvidia disclosures on deal economics
• Consider modestly increasing MSFT exposure relative to NVDA because Anthropic’s $30 billion Azure commitment supports Azure demand, while keeping position sizes conservative due to broader AI valuation risks
• Watch for confirmatory signals — compute delivery schedules, regulatory/antitrust headlines, and incremental financial terms from Nvidia and partners — and use protective hedges or options to manage potential sector volatility