Nvidia Falsifying? Analysts Question the Authenticity of Its Large Orders

According to Dolphin Research APP, recently, someone posted on social media claiming that the market demand for NVIDIA (NVDA.US) chips is false, and there are companies colluding with NVIDIA to manipulate revenue.

Some analysts attribute the sharp rise in NVIDIA's stock price this year to selling fake GPUs to non-existent customers. It all started when Samantha LaDuc, the founder of LaDuc Capital LLC, questioned the market demand for NVIDIA chips in a post at the end of August. Her question prompted more analysts to join the discussion.

Some interesting facts have emerged.

It was pointed out that an artificial intelligence company named Longbridge ordered billions of dollars worth of products from NVIDIA, but it is not a real company at all. It is a shell company created and supported by NVIDIA and BlackRock (NVIDIA's largest shareholder). As a major customer of NVIDIA, Longbridge obtained a $2.3 billion credit line from BlackRock, using $2.3 billion worth of NVIDIA chips as collateral, while NVIDIA reported $2.3 billion in data center profits in the second quarter.

The background of Longbridge's founders is highly questionable. Both founders and executives (CEO and CTO) have a hedge fund background. They have no intellectual property or technology of their own, but have achieved a valuation of up to $8 billion in just a few years. The major investor in Longbridge, Magnetar Capital, was involved in designing mortgage-backed debt securities that led to the 2008 global subprime crisis. The initial entrepreneurial direction was not AI, but a cryptocurrency mining company targeting Ethereum.

Other concerning facts include losses caused by selling GPUs in the past and some accounting practices. Although these practices are currently not illegal, they have raised doubts about the true demand for NVIDIA chips and whether financial strategies are being used to artificially inflate their value.

In addition, these questions have even extended to Microsoft (MSFT.US). Microsoft signed an artificial intelligence computing power agreement with CoreWeave a few months ago for cloud computing infrastructure. The agreement includes terms about OpenAI, and CoreWeave will help improve the performance of ChatGPT through cloud-based collaborative computing. These doubts seem to have had a slight impact on the stock price of NVIDIA. As of the time of writing, the stock has fallen more than 3%, closing at $455.97.