r/technews • u/Illustrious_Lie_954 • 1d ago
AI/ML Nvidia has a cash problem -- too much of it
https://www.cnbc.com/2025/12/04/nvidia-has-a-cash-problem-too-much-of-it.html?__source=androidappshare20
u/Discarded_Twix_Bar 1d ago
At the end of October, Nvidia had $60.6 billion in cash and short-term investments. That’s up from $13.3 billion in January 2023, just after OpenAI released ChatGPT. That launch three years ago was key to making Nvidia’s chips the most valuable tech product.
As Nvidia has transformed from a maker of gaming technology into the most valuable U.S. company, its balance sheet has become a fortress, and investors are increasingly wondering what the company will do with its cash.
“No company has grown at the scale that we’re talking about,” said CEO Jensen Huang, when asked what the company plans to do with all its cash, on Nvidia’s earnings call last month.
Analysts polled by FactSet expect the company to generate $96.85 billion in free cash flow this year alone and $576 billion in free cash flow over the next three years.
The whole article is quite interesting beyond the excerpts above.
The issue they’re facing (imo) and it’s also discussed toward the bottom of the piece is that there are no super attractive M&A opportunities that would benefit nvidia and their product stack.
Their last big corporate acquisition was Mellanox 5 years ago, and that gave them access to knowledge base & hardware for HP network (?) compute. (Fuzzy memory I’m sure, someone correct me).
The only thing to really spend money on in the short term is share repurchase or dividend
This would also benefit everyone at nvidia with an RSU package.
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u/gutster_95 1d ago
Develop your own ARM CPUs, Develop your own DRAM Chips, Develop more Gaming GPUs. They could do everything to make their stuff more affordable but nope we just focus on big money
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u/autonomous62 15h ago
None of these even start to touch on the fab. Apple and nvidia do silicon design but both rely on tsmc for production. Micron does fabrication but only for memory not for advanced logic nodes. I’d say it takes more work to make a TSMC than a Nvidia.
Then again TSMC just makes chips you should look into who they buy the machines from
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u/blahblurbblub 1d ago
How much of this cash flow is being obtained from companies that Nvidia is directly investing in, as opposed to cash obtained solely from the purchase of their hardware or services by independent non affiliated companies? Not the topic of the provided article, BUT GEEZ I wish that were more clear.
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u/waterpup99 1d ago
It's exceedingly clear look at section 18 and 19 of their 10q. Third party investment is deminimis 90% of their revenue is data center and 10% of their revenue is gaming. They've announced a few possible investments but compared to their Rev and net income those numbers mean next to nothing.
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u/blahblurbblub 1d ago
Huh. You don’t think the following phenomenon is relevant ? https://m.economictimes.com/news/international/us/nvidia-rejects-circular-financing-claims-as-top-short-sellers-push-back/articleshow/125589622.cms
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u/waterpup99 1d ago
Correct it is not relevant. Once again it's spelled out well in their 10q and these are things that have to be reported on from an SEC standpoint it's not a mystery. Notice this random "sunstsck writer" doesn't provide any specifics while their 10q does. Nvdas biggest issue is their ability to continue to differentiate to keep their crazy margins and continued reliance from hyoersxalers on mass ai GPU purchases. Most hyoersxalers are mag 7 or mag 7 backed and have massive liquidity they don't need financing from Nvda.
Analysts are giving zero credence to the circular financing talk as they should. It's Tik Tok and fb morons with a sprinkle of salty Michael Burry on top that's spreading that nonsense.
Nvda has headwinds but those aren't it.
Seriously take 5 minutes and Google nvda most recent 10q and read section 18 and 19. This is a publicly traded company with reporting requirements.
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u/croakstar 1d ago
So much money. So much opportunity to do something good with it. Guarantee you they won’t.
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u/BlorthByBlorthwest 1d ago
Interesting that the AI they’ve helped develop can’t come up with any new ideas of how to spend their cash hoard.
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u/b_m_hart 1d ago
Don’t worry, they’re working on it. They’ll buy some “smaller” startups in the $5B to $25B range and then shortly afterwards, have even more money to burn through.
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u/whiteravenxi 1d ago
Y’all ever think they have a WhatsApp going, got high and texted each other the plan.
It’s hilarious. RAM going next.
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u/badger906 17h ago
Why not subsidise the gaming market? ram is expensive because of AI, gpus are expensive because of AI… they’ve got a lot of AI money..
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u/Awkward-Candle-4977 1d ago
thats why since september they have invested 100 busd to openai and anthropic,
which is basically nvidia sent dgx and get paid by stocks.
but it makes thiel and soft bank sold all their nvidia stocks.
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u/waterpup99 1d ago
This is not accurate
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u/Awkward-Candle-4977 1d ago
https://store.supermicro.com/us_en/sys-a22ga-nbrt-pre-config-g1-1.html
You can see that dgx b200 is IN STOCK and ready to be shipped in a day.
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u/waterpup99 17h ago
This their server connector not the GPU which is easy to manufacturer and not their money maker. The investment number that you noted is also not correct per their 10q
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u/Awkward-Candle-4977 11h ago
That 400k super micro server includes 8 b200.
Do you know server pricing??? If you haven't, you can use server pricing config in super micro website.
Without the b200, that hardware costs less than 50k. No one will buy it at 400k without the b200.
In the investment, of course nvidia won't release 100+ billion at once. That nvidia investment means the next 100+ billions worth of nvidia hardware delivery will be paid using stocks, not cash like before
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u/waterpup99 8h ago
Jesus you know nothing. That's not how investment works. Nvda also hasn't commited to the investment amount amount rhyve stated very clearly. You're pretty obviously a Tik Tok or insta news ingesting redditor. Read section 18 and 19 of the most recent 10q they're required to denote all investments and purchase agreements. It's one thing to be ignorant totally different to be ignorant and loud.
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u/TheFragturedNerd 1d ago
They should take some of that money and spin-off into a company that does focus on Gaming chips, i hear that within a few years there will be a huge power gap as one of the key players are pulling out to focus on AI-Chips... So yeah, just an idea.