So nvidia either has to lose by selling for cheap or by their customers going bankrupt?
I think Jensen was thinking shorter term and Kress the CFO was pushing back.
But if you ask me to predict what will happen, 70% of the AI startups will go bankrupt, 20% of them will get bought by bigger companies, 10% will succeed on their own. That's just my generic take on tech startups in general.
This article is 6 months old but basically Jensen is saying the US should keep selling chips to China so that we don't force them to design their own AI chips. That would be bad for Nvidia sales which is the same thing that is happening with US hyperscalers moving away from Nvidia.
https://www.tomshardware.com/tech-industry/nvidia-ceo-jensen...
And for them at worst I'd imagine they get their GPUs back and have to it sell on modest markup instead of 1000%+
https://www.tomshardware.com/tech-industry/artificial-intell...
https://www.aienos.com/cudaplusplus/
https://engineering.fb.com/2026/04/02/developer-tools/kernel...
https://cloud.google.com/blog/topics/ai-infrastructure/torch...
https://finance.yahoo.com/markets/stocks/article/google-to-s...
I would say it's probably a complicated time to be Nvidia.
So, supply was committed, but demand was not. That explains actions like these [1] to finance demand. The challenge for them from a business point of view is to dominate datacenter footprint with increased supply, while balancing demand with high margins - in the face of increased competition. I would guess that the marginal demand from startups and neoclouds is already inflecting downwards due to funding constraints and datacenter bottlenecks.
[1] https://www.cnbc.com/2026/08/10/nvidia-wall-street-asset-man...
> Then he went on to describe the situation the company was in. Major cloud providers were running away from Nvidia, making plans to use alternative chips and lessen their reliance on the firm. Even worse, Huang said, the vast supply of chip wafers and memory Nvidia had committed to buying were coming at him like an “avalanche.”
Jensen's son-in-law was making these vendor financed deals and Kress the CFO now interim CEO was against them.
Large customers like Nvidia and Apple want billions of chips. TSMC can't just ramp up and down instantly. It takes 3+ years and $30 billion to build a modern fab. So TSMC has contracts where you are commiting to buy the wafers for years in advance.
I've worked for multiple fabless chip companies that use TSMC to manufacture. Amazon, Google, Microsoft, and the other big hyperscalers are making their own AI chips to move away from Nvidia. The startups like OpenAI are doing the same so the real demand for Nvidia chips is dropping. But Nvidia can't easily get out of the contracts with TSMC to manufacture and buy the chips. They would probably have multi billion penalties that would show up on their financial statements.
Some people think Nvidia is acting as a VC fund for AI startups but my view is that Jensen freaked out about the dropping demand for Nvidia chips. So he is funding these startups with circular finance deals to buy the Nvidia chips that he can't sell to the hyperscalers anymore.