Connect the dots: The AI boom has been largely blamed on skyrocketing GPU prices over the past year. Following Jensen Huang’s resignation from Nvidia, new information suggests that this was the goal of the former CEO’s business strategy, which has long sparked accusations of circular financing.
A recent Wall Street Journal profile of Nvidia interim CEO Colette Kress shed light on how Nvidia has controversially funded its own customers to drive the AI boom. According to the report, the company has been pushing to close more deals in mid-to-late 2026 to absorb an oversupply of TSMC wafers and keep GPU prices high.
For at least the last year, Nvidia has been accused of prolonging the AI boom by propping up companies that buy its chips. Co-founder and former CEO Jensen Huang, along with CFO Kress, even went so far as to defend the company against comparisons to Enron, which used similar tactics to illegally hide its debt before its 2001 collapse.
Also Read: GPU Prices Are Getting Out Of Control – Q4 2026 Update
Behind the scenes, Kress expressed concern about the scale of deals Nvidia signed with cloud providers and big AI companies like OpenAI. Nvidia still moved forward, but by summer 2026, the company was wondering if it had pushed too far amid an “avalanche” of semiconductors it had ordered from TSMC.
It was around this time that Huang berated Kress, calling her a “deer in the headlights,” according to a person familiar with the matter. Nvidia has begun slowing down, scaling back and suspending some of its funding deals, including one with OpenAI that originally included a $250 billion backstop for the world’s largest data center.
AI data centers have siphoned off DRAM and NAND manufacturing capacity traditionally used for RAM and storage in consumer devices, driving up prices. Nvidia’s GeForce GPUs have been particularly hard hit, with prices often exceeding 160% of their original MSRP. The company’s flagship RTX 5090 has become unobtainable as Nvidia has shifted its VRAM and semiconductors toward data center GPUs.
Related: Without Jensen Huang, is it game over for GeForce?
As his financial support deals ended, Huang became concerned about the company’s stock valuation, with its average monthly multiple falling far behind that of other big tech companies.
At a conference in Berlin, the former CEO told major customers the story of a busy Japanese soup vendor who refused to give him a second helping after waiting in line, saying the vendor had too many customers and not enough soup. Huang used the story to emphasize the importance of maintaining a diverse customer base and keeping prices high, suggesting that Nvidia’s circular financing strategy inflated GPU prices by creating the perception of high demand.
The story emerged after Huang resigned following the revelation of several extramarital affairs. One involved Alice Huang (no relation), whose company, Megaspeed, was suspected by U.S. intelligence services of diverting Nvidia chips to China in violation of export regulations. While some claim she is a spy for Beijing, President Trump and the Justice Department have said that has not been determined.
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