WSJ: Nvidia Financed Startups to Absorb Excess Chips as Huang Warned of a TSMC "Avalanche"

• Dispatched: Nov 14, 2026 · 05:08 ET (10:08 UTC)

One-sentence summary: A Wall Street Journal investigation reports that former CEO Jensen Huang used Nvidia's balance sheet to finance AI startups and data-center operators to keep them buying its chips, absorbing prepaid silicon and memory ordered from TSMC instead of letting prices fall; the latest 10-Q puts total commitments and guarantees at about $530 billion, from about $184 billion a quarter earlier.

Verification status: ⚠ Exclusive investigative report by The Wall Street Journal, based on internal documents and people familiar with the matter; the figures match Nvidia's Form 10-Q disclosures. Nvidia has long rejected the "circular financing" label, and the reported motives and remarks are not yet confirmed (Single-source / Unconfirmed) .

Core Facts & Consensus Delta:

The Journal published its investigation on 2026-11-13 (republication time via Wccftech: 2026-11-13 14:23 ET / 19:23 UTC). At a tense meeting in August 2026, then-CFO Colette Kress pushed to rein in circular-financing commitments to smaller cloud providers and major AI firms such as OpenAI and Anthropic, while Huang pressed ahead, privately acknowledging that large cloud companies were shifting to in-house custom chips and that the prepaid TSMC wafers and memory Nvidia had committed to buy were "coming at him like an avalanche." The report says Nvidia has since asked TSMC to wind down upcoming chip orders.

Quantitative reference: SemiAnalysis, analyzing Note 10 of Nvidia's latest 10-Q, puts total commitments and guarantees at about $530 billion, up nearly threefold from about $184 billion the prior quarter, including about $279 billion of supply and capacity purchase obligations and about $108.5 billion of maximum gross guarantee exposure, including up to about $105 billion for one OpenAI-affiliated data-center campus in Ohio. The OpenAI compute backstop was first discussed at roughly 8 gigawatts, worth up to $250 billion; Kress cut the signed cap to about 4.25 gigawatts, or up to $125 billion. Nvidia has taken part in 105 startup investment rounds this year, including an $800 million check into Reflection AI. Terms and recipients undisclosed.

Market reaction: Nvidia closed at $162.85 on 2026-11-13 16:00 ET / 21:00 UTC, down 2.0% on the day and about 13% on the week, erasing roughly $573 billion in its sixth straight weekly decline, the longest since 2012, with market value below $4 trillion for the first time since July 2025.

Supply-Chain & Market Read-Through: If the reporting holds, the durability of Nvidia's demand becomes the central variable for the AI hardware chain. Scaling back TSMC orders affects advanced-node and CoWoS packaging utilization and could reset HBM3E and HBM4 allocation quotas and lead times. Memory makers SK hynix (KRX: 000660), Samsung Electronics (KRX: 005930), Micron (MU) and SanDisk (SNDK) built sold-out guidance on Nvidia purchase commitments, so any change in order cadence feeds through to enterprise SSD procurement and contract prices. Hyperscalers shifting to in-house silicon accelerates custom-ASIC substitution (AVGO, MRVL) and raises neocloud financing costs.

Next Catalysts & Watchpoints:

• After the close on 2026-11-17 (ET): Nvidia reports third-quarter results, with Kress presenting as interim CEO for the first time; LSEG consensus revenue is about $108.9 billion. Investors will watch whether she scales back the financing pipeline.
• 2026-12-01 and 2026-12-03 (ET): Huang faces a closed-door House deposition and public Senate Banking Committee testimony, where questioning may cover China chip exports.

Sources:

• Wccftech (summarizing the Wall Street Journal report) (Published: 2026-11-13 14:23 ET / 19:23 UTC)
• The Apex Wire (Published: 2026-11-14 01:42 ET / 06:42 UTC)
• Longbridge (Published: 2026-11-14 00:20 ET / 05:20 UTC)
• Hunterbrook (Form 10-Q commitments and guarantees analysis)

Information only, not investment advice.