NVIDIA spent much of the past year insisting it’s nothing like Enron. Tech critic Ed Zitron, who writes Where’s Your Ed At, argues the more useful comparison is the vendor financing schemes that preceded the collapse of telecom giants Lucent and Nortel.

What Zitron said

Writing on Where’s Your Ed At, Zitron argues NVIDIA has built a financing structure that pushes risk onto everyone except itself.

“NVIDIA CEO Jensen Huang has employed many of the same tactics used by Lucent, Nortel, and many of the big dot-com busts, but has been smart enough to make everybody else carry the risk,” he writes. Unlike Lucent’s approach, “direct vendor financing like Lucent did with Winstar (where it effectively loaned its customers money to pay it with),” Zitron says NVIDIA works through “neoclouds”, companies like CoreWeave, Nebius, and IREN that exist mainly to buy NVIDIA’s chips and rent out the computing power to other businesses.

NVIDIA operates as their “early stage investor, IPO anchor, post-IPO investor, $6.3 billion customer and data center lease backstop.” In Zitron’s account, NVIDIA invests early and buys shares when companies go public. It also purchases computing capacity and backs data center leases. That combination, Zitron says, has let neoclouds raise “tens of billions of dollars’ worth of debt” from outside investors. He sums up what NVIDIA has become as an “asset management and marketing firm that happens to sell semiconductors,” and notes it now represents more than 7% of the total value of the NASDAQ stock exchange.

Who Zitron is

Zitron is the CEO of the media relations firm EZPR and writes Where’s Your Ed At, a newsletter focused on tech industry criticism. He also hosts the Better Offline podcast.

What he gets right, and where it’s overstated

The overlap between supplier, investor, and customer is the useful part of Zitron’s argument. Customers can borrow from outside investors to buy a supplier’s products. If those customers cannot pay, the demand supporting the original investment weakens too.

The financing analogy does not establish that NVIDIA’s partners face the same financial distress that preceded Winstar’s failure. The Lucent and Nortel comparison remains Zitron’s framing, not a demonstrated outcome.

Why it’s notable

Dollar totals show how much NVIDIA sells and how large data centers become. Zitron asks who holds the risk when a supplier also helps finance its customers.

What it means for builders

If your product rents GPU capacity, computing hardware used to run AI models, the provider’s financing affects your dependency.

A neocloud specializes in that capacity. A hyperscaler, such as AWS, Azure, or Google Cloud, offers a broader range of cloud services. That’s not a reason to switch providers today. Supplier financing can influence capacity and pricing alongside demand for chips.

Understand who owns and finances the hardware behind your GPU bill, and what happens to your service if that relationship changes.

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