Monologue: Into The Jensenverse

**Ed Zitron** (0:05)
Hello, and welcome to your latest Better Offline monologue. I'm your host Ed Zitron.
The Groundhog once again saw its shadow, with Nvidia reporting record earnings, continuing to inflate an ever more dangerous AI bubble, with $96 billion worth of revenue, and 16% of that coming from a single unnamed customer. For the first half of the fiscal year 2027, 44% of Nvidia's $177.8 billion in revenue came from a mere three customers. And as a note, this was all part of its second quarter of fiscal year 2027 earnings. You're gonna be confused, but Nvidia's fiscal years run from February 1st of the year before to January 31st of the year of. So it's currently fiscal year 2027, which begun on February 1st, 2026 Annoying, but I didn't do it. Don't blame me. Don't be mad at me for how Nvidia does business. Anyway, to make matters worse, 70% of Nvidia's current accounts receivable, so gear that's been shipped to a customer that's yet to be paid for, it's from five customers. Something that Nvidia reported while adding that for certain investment grade customers, it was offering payment terms ranging from 90 days to an entire year.
If you're wondering what investment grade could refer to, both CoreWeave and Nebius, two unprofitable Neo clouds that exist only to raise debt and buy GPUs, mostly to rent them to the same three or four companies, have had their debt rate as investment grade by ratings agencies because they're collateralized by contracts by companies with good credit.
What is it with ratings agencies? It's just like every time you put your hands in front of your face, and they'll be like, where'd they go?
Anyway, all of this is a very complex way of saying that the vast majority of Nvidia's revenue comes from a handful of companies, and each one, including hyperscalers that make up more than 50% of its revenue over the last few years, are now reliant on debt thanks to skyrocketing costs of Nvidia's GPUs. While Nvidia is unquestionably profitable and thriving revenue-wise, it's only doing so because of a few companies who are willing to be finned on by Jensen Huang, and it's all beginning to look like the AI bubble only continues to inflate as long as Nvidia can keep pumping it full of money and hype. You see, in the run-up to earnings, Nvidia sunk $6 billion into Poolside, a flailing open-source LLM company that failed to raise billions of dollars earlier in the year, hiring away most of its staff in what its founders said was not an equihire, other than the fact that everyone's leaving and other than the founders. Anyway, Nvidia is also rumored to be sinking billions into pathetic AI search company, Perplexity, a $30 billion valuation, which is insane and it's not worth that. Likely because Perplexity is one of the few companies in the world that buys any significant amount of AI compute, likely a few hundred million dollars a year, but I'm just guessing. It's also investing in Stargate, Abilene, Lansium at a multi-billion dollar valuation as well as considering putting money into AI data center power company Cloverleaf and backstopping over a hundred billion dollars of a softbank-backed data center for openAI to rent out in Ohio, though that backstop only kicks in if the thing actually gets built. Ship, chip, sorry, forgot one. Nvidia is also buying AI model hosting platform Hugging Face for a little under $13 billion. For some context, Hugging Face had $150 million in annualized run rate, which works out to a pathetic $12.5 million a month, which is insanely small considering its notoriety. It's almost as if every AI company just kind of stinks.
As a reminder, Nvidia is invested in Anthropic, OpenAI, CoreWeave, Nebius, Iron, NScale, Intel, SpaceX and both Wrecker and Wecker, which are somehow two different companies. It has backstopped CoreWeave's leases, signed over $30 billion in multi-year agreements to rent back its GPUs, and created bizarre revenue share deals where it agrees to backstop data centers and receive a cut of the revenue above a certain threshold, which is obviously dependent on the bloody thing being built and also being paid for. And on its latest earnings call, CFO Collette Cress said that the company did not see this as circular financing, despite there being so many different deals where the money moves in a perfect circle. The main of James Keenan is mumbling some shit about Judith and Magdalena. The AI bubble is becoming increasingly about whether Jensen Huang and Nvidia can keep slapping duct tape on the sides of data center and AI model companies, and in turn whether hyperscalers can keep raising enough debt to keep paying for their GPUs and more. To quote Lindsay Tyler and Nishant Sadyam of Morgan Stanley, Nvidia is now a balance sheet as a service company with over $366 billion in commitments, including $25 billion of data center leases yet to commence, which is strange considering Nvidia is the company that sells the data centers the GPUs. Why does Nvidia need to rent back the GPUs? I thought the demand for AI was so high, Jensen. And if you weren't already a little bit concerned, Huang also claimed on an analyst call that the world has already achieved artificial general intelligence, which he defines as the ultimate form of the technology where the machines can think and act for themselves. This has of course not actually happened, will not actually happen, and should genuinely get him lambasted in the press, but because number has gone up, everybody is happy. Yay! Yay! Good job Jensen! AGI is here! Yay! Fucking kill me.