Nvidia is funding the companies that buy its chips

Nvidia may invest $2.5 billion in Thinking Machines Lab, the AI startup founded by former OpenAI CTO Mira Murati.

The startup is also reportedly raising at least $1 billion at a valuation of around $40 billion.

The detail that explains the deal:

Thinking Machines Lab has already committed to using at least 1 gigawatt of Nvidia's Vera Rubin infrastructure.

So Nvidia could invest in the company, and part of that money may eventually come back to Nvidia through hardware purchases.

This isn't new. Nvidia has made similar investments in OpenAI, Anthropic, cloud companies and AI infrastructure startups. It has backed more than 100 startups in the past two years.

The strategy is simple: Nvidia needs AI companies to keep buying more compute, so investing in them helps secure future demand for its chips.

The concern is circularity.

If Nvidia invests in a company that then spends heavily on Nvidia hardware, it becomes harder to tell how much demand is truly independent.

And Nvidia is spending aggressively across the AI ecosystem, including the reported $12.93 billion Hugging Face acquisition and the $1 billion Poolside deal.

Nvidia now sells the infrastructure behind AI and funds the companies that need it.