Nvidia’s $100 billion AI Bet Stirs Wall Street Bubble Fears

- Nvidia’s $100 billion OpenAI investment stirs AI bubble fears - Wall Street warns self-reinforcing funding cycles echo dot-com crash On October 19, 2025, Cryptopolitan reported that Nvidia plans to invest $100 billion in OpenAI, which is expected to use that capital to acquire Nvidia's chips. This type of circular financing creates a self-reinforcing cycle where AI providers fund their customers, who then use the resources to purchase products from their investors. Nvidia's investment in CoreWeave, a major data center operator and customer, shows a similar trend, as the company also entered an agreement to purchase CoreWeave’s unused cloud capacity through 2032. Concerns about this strategy extend beyond Nvidia. On the same day, Cryptopolitan highlighted warnings from Blackstone President Jonathan Gray, who labeled circular financing and inflated valuations as top concerns for investors and compared the situation to the frenzy before the dot-com crash. Similarly, Lisa Shalett, Chief Investment Officer at Morgan Stanley Wealth Management, warned about the reliance on a small number of AI-linked companies to drive market growth, describing this as a significant risk. While some commentators argue that fears of an AI bubble are overstated, citing the established profits and strong cash flows of leading companies like Nvidia, others see troubling signs. According to Quartz, a recent Bank of America survey revealed that global fund managers now rank the “AI bubble” as the market’s primary tail risk, despite remaining optimistic about the technology’s overall growth potential. Current market actions also reflect cautious investor sentiment. Although global venture capital investment in AI continues to thrive, reaching $120 billion in the third quarter of 2025, risk aversion appears to be growing. For instance, hedge funds have executed the largest sale of U.S. and global equities since April, and macro shorts are reportedly rising. The AI sector continues to attract significant investment and market euphoria. Consequently, Wall Street remains divided on whether these trends signal sustainable growth or are the precursors to a future correction. Industry concerns highlight potential vulnerabilities in an increasingly concentrated and self-reinforcing market.