Making a large number of very risky bets on small startups is how venture capital works. Most will fail, hopefully a few will make up for that.
So yeah if it goes tits up, they loose customers, but they’re customers that wouldn’t exist otherwise, and they can easily pay to make the debt collectors go away. But if it’s anything except a complete collapse, then they’ve grown the customer base for their products long term, and hedged against hyper scalers replacing them with custom silicon.
At the moment it looks like the downside risk is limited, and in the worse case, tolerable, whereas the upside is unbounded. Those are really good bets to be placing, the only trade-off is opportunity cost. But even there, what other opportunities could Nvidia be deploying their cash into, beyond share buybacks?
> they can easily pay to make the debt collectors go away.
Sure, if it didn't come at the same time as all their other customers pulling back, and lots of other debt collectors simultaneously knocking on the door, and a spike in the cost of capital (read: stock starts crashing).
That's one way to say, "maintain a monopoly where everyone needs you and you depend on no one."
Well funded hyperscalers are trying to reduce dependence on Nvidia. And Nvidia is conversely trying to push into cloud with these credit backstop/revenue sharing deals.
It does make them even more leveraged to the bubble though. If a neo cloud collapses, they're lose customers and gain debt collectors. It's a sound business strategy until it isn't. It's not good risk management, but then you don't become the world's largest company by making safe bets.