A core risk in the AI build-out isn’t demand this quarter—it’s who ultimately pays the bill. Call it circular financing*: startups, clouds, and suppliers funding one another in loops that can amplify booms…and busts.
Here’s the on-the-record picture: NVIDIA’s Q3 FY25 showed accounts receivable at $33.39B and inventories at $19.78B, both materially higher than earlier in the year. The 10-Q also shows heavy receivable concentration among a handful of customers. None of this is “proof of wrongdoing,” but it does increase sensitivity to any slowdown or delayed payments.
On the demand side, huge, multi-year compute commitments are piling up across the stack. OpenAI signed $11.9B, later $22.4B, in contracts with CoreWeave, which itself has raised sizable GPU-backed debt. Separately, reports of an OpenAI–Oracle ~$300B deal and Oracle’s $455B RPO* highlight just how big these promises are. Again, not inherently bad—just big and dependent on future cash flows.
NVIDIA also disclosed a letter of intent to invest in OpenAI and a plan to invest up to $10B in Anthropic, while its Q3 press release touted an OpenAI plan to deploy at least 10GW of NVIDIA systems. These ties can be strategically sound—but they also tighten the loop between vendor, platform, and end customer. If downstream monetization lags, working capital balloons and credit risks migrate back up the chain.
Investor takeaway: The signal isn’t “fraud”; it’s fragility. Watch cash collections, contract durability, and who underwrites unused capacity. If growth keeps converting to cash, the loop is virtuous. If not, vendors may end up financing their own revenue, and that’s when the loop snaps. For now, the numbers are big, the disclosures are improving, and the bar for paid-for, productive AI keeps rising.
📚 Decoder
Circular financing: Interlinked funding/commitments where vendors, platforms, and customers finance each other’s demand.
RPO (Remaining Performance Obligations): Contracted revenue not yet delivered; backlog to be recognized over time.
⏱️ That’s this week’s Signal Spotlight.
Share if you found the info useful, and be on the lookout for your next brief from 5 Minute Markets.
Educational only—not investment advice.