Nvidia net profit and cashflow are well above >100bn, they have approximately zero debt in relation. If some of their investments fail, and they will, I'm pretty sure nothing will happen at all beyond a write-down. It's also not obvious at all how this is bad practice on nvidias part, what else are they supposed to do with all that money? Let it depreciate in their account? Distribute even more than the 30+bn they already do to shareholders?

Repossess the GPUs and put them back on the market?

Yes. And Jensen has been careful with these investments. Nvidia is not Softbank.

These startup will need to provide value, get a few extra rounds of funding, further fund and paid back those GPUs. In the case no more rounds can be found and no market exit. I would expect Nvidia will buy it, gets back all the GPU and IPs.