Nvidia’s withdrawal from Huang’s AI circular funding won’t bring back affordable GeForce cards in 2027

Nvidia’s financial support for AI startups and cloud providers that buy its data center GPUs has led some people to blame the company for the shortage and high prices of gaming graphics cards. But this connection is not so simple. Even if Nvidia reduces these provisions, gamers are unlikely to see cheaper GeForce graphics cards in 2027. AI accelerators and gaming GPUs rely on different components and manufacturing processes, so a slowdown in one market won’t automatically improve supply in the other.

Nvidia reportedly provided guarantees and other financial support that helped cloud providers and AI companies obtain financing to purchase Nvidia hardware. In practice, the chipmaker helped create demand for its own products – a model often described as “circular financing.”

This deal carries financial risks: If customers can’t meet their obligations, Nvidia could suffer losses on its warranties and end up with equipment it can’t sell. The scale of these financial commitments reportedly caused disagreements between former CEO Jensen Huang and CFO Colette Kress, who now serves as interim CEO. Huang reportedly wanted to maintain demand for server accelerators, while Kress favored reducing Nvidia’s exposure to collateral.

Some might have hoped that Kress’ appointment would help alleviate the problems facing GeForce buyers. But supporting demand for AI accelerators is not the same as restricting the supply of gaming graphics cards. Although both product families use GPUs, they rely on different types of memory and different hardware designs.

Nvidia’s advanced data center accelerators typically use high-bandwidth memory (HBM) and complex chip packaging, while GeForce cards rely on GDDR memory. A server accelerator can’t just be converted into a gaming graphics card. Even if Nvidia shifted its capacity to GeForce, it would still need enough GDDR memory, packaging capacity, and circuit boards before additional cards could reach stores.

There is also a considerable delay between placing an order to manufacture chips and putting a finished product on store shelves. Semiconductor analyst Ian Cutress told PCWorld that producing silicon wafers at a foundry like TSMC typically takes about six months. Manufacturers then need to secure the memory, arrange the packaging, and assemble the graphics cards. So the increase in GeForce orders today will not translate into a sudden increase in retail availability within a few weeks.

This doesn’t mean that the AI ​​and gaming GPU markets are completely separate. Both compete for manufacturing resources, investment and supplier attention. With data center hardware significantly more cost-effective, Nvidia and memory makers have reason to prioritize AI products.

If Nvidia cuts its funding programs, demand for data center GPUs could eventually weaken. This could free up some capacity for GeForce production over time. But suppliers would need new orders and revised production plans, and the process would take time. Existing contracts would not disappear either. With memory availability and manufacturing constraints still present, affordable gaming GPUs are unlikely to make a comeback in 2027.

I have been fascinated by computers, electronics and modern technology since my childhood. I started writing computer news in high school and have been doing it continuously for over 10 years. During this time I have worked for many media outlets and am now an editor at 3DNews. Sometimes I also write smartphone reviews. In July 2024, I decided to try my hand at writing news on Notebookcheck. When I’m not working, I enjoy playing video games, doing puzzles, and traveling.