Report alleges Nvidia funded AI startups to buy its GPUs and engineer scarcity

A Wall Street Journal report, relayed via TechPowerUp, alleges that NVIDIA invested in AI startups that then bought NVIDIA GPUs and built data centers, aiming to sustain the perception of high demand and absorb an oversupply of chips from TSMC. The report cites an August meeting in which CFO and acting CEO Colette Kress pushed to scale back circular financing and NVIDIA's $250 billion deal with OpenAI, and says Jensen Huang called her a "deer in the headlights." It also notes that the small cloud providers NVIDIA backed could not afford its GPUs, making them a potential financial dead end.