Circular financing is the phrase that follows Nvidia into almost every deal it signs with an AI customer, and Reuters handed it a new test on 11 September 2026. Anthropic, the company behind Claude, is in talks to bring Nvidia in as an anchor investor for an initial public offering that could raise as much as $100 billion at a valuation of around $2 trillion, according to two people familiar with the matter. One of them said Nvidia is considering investing up to $10 billion. Anthropic declined to comment, Nvidia did not immediately respond, and the plans “remain under discussion and could change”.
The circular financing critique is simple to state. A supplier puts money into a customer, the customer spends that money on the supplier’s products, and the supplier books the spending as revenue. Nvidia already holds an Anthropic stake from its November 2025 commitment, and Anthropic already buys capacity built on Nvidia silicon through Microsoft Azure and Nscale. An IPO cheque would add another leg at the exact moment public investors are asked to price the artificial intelligence build-out through a single listing.
We covered the anchor role itself, including what Arm’s and Instacart’s prospectuses show an anchor actually signs, in our report on Nvidia in talks to invest in Anthropic’s mega IPO as anchor investor. This piece asks the other question: is the money circular, and does it matter? We read Nvidia’s 10-Q for the quarter ended 26 July 2026, CoreWeave’s 2025 order-form filing, Nvidia’s August 2026 financing announcement, Jensen Huang’s own defence of the model, and the record of how vendor lending ended for Lucent and Nortel.
Table of contents
- What Circular Financing Means in the Anthropic IPO Talks
- The Circular Financing Loop Around Anthropic, Leg by Leg
- How the OpenAI Circular Financing Loop Changed Shape
- Four Circular Financing Instruments in Nvidia’s 10-Q
- What Nvidia Says About the Circular Financing Charge
- Where the Circular Financing Argument Is Weakest
- The Telecom Precedent Behind Every Circular Financing Warning
- Why an IPO Anchor Is a Different Kind of Circular Financing
- Who Carries the Risk If the Loop Slows
- Signals That Separate Circular Financing From Real Demand
- What Circular Financing Means for Businesses Buying AI
- Frequently Asked Questions About Circular Financing and Anthropic’s IPO
- References and Further Reading
What Circular Financing Means in the Anthropic IPO Talks
The phrase gets used loosely, which is part of why the argument never resolves. Harvard’s Program on Negotiation describes circular deals as arrangements in which “investment money is flowing between companies that also buy from or sell to one another.” CNBC’s working definition, from its 26 August report on Huang’s defence, is tighter: a company “provides financing to customers that then use some of that money to buy its products, raising questions about whether the arrangements are artificially supporting demand and sales.”
Circular financing is a question about demand, not legality
Nothing in a circular financing structure is improper on its face. Suppliers have lent to customers, taken equity in them and guaranteed their leases for decades. The concern is informational. When the seller is also the funder, its revenue stops being a clean signal of what outside buyers would pay without the seller’s money. The Harvard piece lists the familiar risks, from a resemblance to round-tripping to a boom that outruns end-user demand, and the familiar remedy: keep investment negotiations separate from sales negotiations.
The four shapes circular financing takes at Nvidia
Nvidia’s filings and announcements show four distinct instruments, and they carry very different risks. Lumping all of them together as circular financing is how both sides of the debate end up talking past each other.
| Shape | How the money moves | Nvidia’s disclosed figure | Where it is disclosed |
|---|---|---|---|
| Equity stakes | Nvidia buys shares in companies that buy its systems, directly or through a cloud | $47.9 billion of private holdings, $25 billion more committed | 10-Q, quarter ended 26 July 2026 |
| Capacity commitments | Nvidia commits to buy cloud time from partners that bought its hardware | $36 billion of AI cloud agreements, $29 billion of cloud service agreements | Same 10-Q |
| Guarantees | Nvidia backs a customer’s or partner’s lease and buildout obligations | Capped at $105 billion for an OpenAI-linked campus, $3.5 billion for AI cloud partners | Same 10-Q |
| Third-party platforms | Nvidia arranges outside capital to finance purchases of its compute | Over $500 billion targeted under memorandums of understanding | Nvidia announcement, 10 August 2026 |
Where the Anthropic talks fit in the circular financing map
The Anthropic anchor talks sit in the first row. An IPO purchase is plain equity at a public price, with no guarantee and no capacity buyback attached, as far as anything reported shows. That makes it the least exotic of the four instruments. It is still the one that matters most for perception, because it would put Nvidia’s name next to the largest offering ever attempted, by a company that rents its chips.
The Circular Financing Loop Around Anthropic, Leg by Leg
Tracing a circular financing loop means following disclosed dollars in both directions. Everything below comes from figures published by Anthropic, Microsoft, Nvidia or Reuters. Nothing is estimated, and where a number is an “up to” ceiling it is labelled as one.
Money flowing from Nvidia to Anthropic
On 18 November 2025 Anthropic announced that Nvidia and Microsoft would invest up to $10 billion and up to $5 billion respectively. The money arrived in the Series G, the $30 billion round at a $380 billion post-money valuation announced on 12 February 2026, which lists both companies among its investors. CNBC reported on 4 September that Nvidia had “finalized” the $10 billion. The reported IPO cheque of up to $10 billion would be a second pass through the same circular financing question.
Money flowing from Anthropic back toward Nvidia silicon
The same November announcement committed Anthropic to buy $30 billion of Azure compute capacity and to contract up to one gigawatt on Nvidia Grace Blackwell and Vera Rubin systems. In August, Anthropic agreed to pay Nscale about $45 billion over six years for roughly 460 megawatts in West Virginia running Vera Rubin, as we covered in our report on the Nscale $45 billion Vera Rubin deal. Neither contract pays Nvidia directly. Microsoft and Nscale buy the chips, and Anthropic is their tenant.
The leg that breaks the circle
Anthropic’s largest disclosed compute contract does not touch Nvidia at all. Its 20 April 2026 agreement with Amazon Web Services runs to more than $100 billion over ten years on Amazon’s Trainium chips, and its 6 April agreement with Google and Broadcom adds multiple gigawatts of TPU capacity from 2027. A true circular financing loop needs the customer’s spending to come back to the investor. At Anthropic, on its own announcements, more of that spending goes to rival silicon than to Nvidia’s.
| Leg | Direction | Disclosed amount | Nvidia silicon? | Source |
|---|---|---|---|---|
| Series G equity | Nvidia to Anthropic | $10 billion | Not applicable | Anthropic, Nov 2025 and Feb 2026 |
| IPO anchor, reported | Nvidia to Anthropic | Up to $10 billion | Not applicable | Reuters, 11 Sept 2026 |
| Azure capacity | Anthropic to Microsoft | $30 billion, plus up to 1 GW | Yes, Grace Blackwell and Vera Rubin | Anthropic, Nov 2025 |
| Nscale capacity | Anthropic to Nscale | About $45 billion over six years | Yes, Vera Rubin | Reported 26 Aug 2026 |
| AWS capacity | Anthropic to Amazon | More than $100 billion over ten years | No, Trainium | Anthropic, 20 Apr 2026 |
| Google and Broadcom capacity | Anthropic to Google | Multiple gigawatts from 2027 | No, TPU | Anthropic, 6 Apr 2026 |
Sizing the Nvidia-linked legs
Put the Nvidia-linked legs side by side and one ratio stands out: $75 billion of disclosed commitments on Nvidia systems, against $20 billion that Nvidia has invested or is reported to be considering, a multiple of 3.75.
The ratio flatters the circular financing case in one way and undersells it in another. It flatters it because Microsoft and Nscale keep most of those contract values as their own revenue; only the hardware portion reaches Nvidia, and neither contract discloses what that portion is. It undersells it because Nvidia’s equity is not the only money Anthropic spends. Amazon, Google, Microsoft, sovereign funds and venture investors all put money into the rounds that pay for those contracts.
How the OpenAI Circular Financing Loop Changed Shape
Anthropic is not the first frontier lab where Nvidia has been investor and supplier at once. OpenAI is where the circular financing critique took hold, and its record shows how much the headline numbers in these arrangements can move.
From a $100 billion letter to a $30 billion cheque
In September 2025 Nvidia announced a letter of intent to invest up to $100 billion in OpenAI as OpenAI deployed 10 gigawatts of Nvidia systems. MIT Sloan professor Michael Cusumano told the Financial Times the structure was “kind of a wash”, because the investment and the chip purchases were of similar size, as TechCrunch later recounted. By November, Nvidia’s risk factors warned there was “no assurance” of definitive agreements. In February 2026 Nvidia put $30 billion into OpenAI’s $110 billion round at an $852 billion post-money valuation.
From equity to credit support
The shape changed again in August. Nvidia’s 10-Q records guarantees “capped at a total of $105 billion” to provide credit support on a land, power and shell buildout with affiliates of SB Energy “on behalf of a customer, an affiliate of OpenAI Group PBC”, tied to leases for about 4.25 gigawatts at a campus in Pike County, Ohio. CNBC described it as backing for a compute campus “where OpenAI will be the tenant”. The cap is larger than the original letter of intent, but it is a contingent obligation, not cash.
| Date | Instrument | Amount | What happened |
|---|---|---|---|
| Sept 2025 | Letter of intent tied to 10 GW of Nvidia systems | Up to $100 billion | Not definitive; Nvidia’s risk factors warned of “no assurance” |
| 30 Jan 2026 | Wall Street Journal report | None stated | Talks described as “on ice” |
| Feb 2026 | Equity in a $110 billion round | $30 billion at $852 billion post-money | Invested |
| 4 Mar 2026 | Huang at Morgan Stanley’s technology conference | None stated | Signalled the last private investment before an IPO |
| Aug 2026 | Guarantees for SB Energy’s Ohio campus | Capped at $105 billion | Contingent credit support for about 4.25 GW of leases |
What the OpenAI record says about the Anthropic talks
Two circular financing lessons carry over. First, Nvidia’s commitments get renegotiated in both directions: $100 billion became $30 billion of equity, then a separate and larger guarantee. Second, Huang has already said where private investing ends. At Morgan Stanley’s conference on 4 March 2026, TechCrunch reported, he said the OpenAI and Anthropic investments were likely to be Nvidia’s last in both, because once the companies go public the opportunity to invest closes. An IPO anchor cheque is the one form of participation that remark leaves open, which is why the circular financing question has arrived at the listing itself.
Four Circular Financing Instruments in Nvidia's 10-Q
Nvidia’s quarterly filing does not name Anthropic, and it does not use the phrase. It does disclose, line by line, every instrument critics point to, which makes it the best single document for sizing circular financing exposure rather than arguing about it.
Equity in customers and partners
Non-marketable equity securities, Nvidia’s private holdings, stood at $47.9 billion on 26 July 2026, up from $22.3 billion at the start of the fiscal year on 25 January. Marketable equity securities added $42.8 billion. The company says it “committed to make certain equity investments in AI model makers, infrastructure financiers, and other private companies, subject to certain contingencies”, with $25 billion still to fund, $18 billion of it in the rest of fiscal 2027. The breadth shows in its recent deals, from its $3.5 billion MediaTek bet to the planned $12.9 billion Hugging Face acquisition.
Buying back the capacity it sold
Two purchase-obligation lines complete the circular financing loop in the most literal sense. Under $36 billion of AI cloud agreements, the filing says, “AI clouds procure our data center infrastructure products and we commit to cloud service agreements, which the AI clouds can unilaterally stop providing to us and sell to third-party customers at more advantageous rates.” A further $29 billion of cloud service agreements supports research on Nvidia’s own open models, including Nemotron, Cosmos and GR00T.
CoreWeave’s September 2025 filing shows what one of these contracts looks like. Its order form with Nvidia has “an initial value of $6.3 billion”, and in instances where CoreWeave’s capacity “is not fully utilized by its own customers, NVIDIA is obligated to purchase the residual unsold capacity through April 13, 2032”. That is circular financing in its purest form: a supplier promising to be the customer of last resort for the hardware it sold.
Guarantees on partners’ buildouts
Nvidia reports land, power and shell guarantees for select AI cloud partners with a “maximum gross exposure under all agreements” of $3.5 billion, alongside the OpenAI-linked guarantees capped at $105 billion. It also holds $3.3 billion of equity-method investments in infrastructure financiers, some of them variable interest entities with a maximum loss exposure, including future committed amounts, of $4.7 billion. Guarantees are the circular financing instrument with the widest gap between what is recorded today and what could be owed.
Capital that stays off Nvidia’s books
The fourth instrument is designed not to appear in the 10-Q at all. On 10 August Nvidia signed memorandums of understanding with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to establish independent compute financing platforms that aim to “mobilize over $500 billion of third-party capital”. CNBC described the goal as helping customers finance Nvidia hardware “without tapping their own balance sheets”, and reported BlackRock’s Larry Fink comparing it to the creation of mortgage-backed securities in the 1970s.
| Instrument | Amount, 26 July 2026 | What comes back to Nvidia | Who can walk away |
|---|---|---|---|
| Private equity holdings | $47.9 billion | Valuation gains and strategic alignment | Nvidia can exit only when a buyer or a listing exists |
| Unfunded equity commitments | $25 billion | Future stakes | Subject to contingencies |
| AI cloud agreements | $36 billion | Hardware sales to the partner, plus cloud capacity | The AI clouds, which can stop supplying and resell |
| Cloud service agreements | $29 billion | Compute for Nvidia’s own model research | Terms not disclosed |
| AI cloud lease guarantees | $3.5 billion maximum | Partners’ data centres get built | Payable only if a partner fails to pay |
| OpenAI-linked guarantees | Capped at $105 billion | A 4.25 GW campus for a major customer | Payable only if the obligations are not met |
| Compute financing platforms | Over $500 billion targeted, third-party money | Customers funded to buy Nvidia compute | Memorandums of understanding, no disclosed commitments |
Scaling the exposure
Set against the single $105 billion cap, the rest of the book looks modest. Set against second-quarter revenue of $96.2 billion, the guarantee cap alone is 109% of a quarter’s sales.
None of those numbers is labelled Anthropic. The filing says “one AI research and deployment company contributed a meaningful amount of our revenue by purchasing cloud services from our customers” without naming it, and that one direct customer accounted for 16% of revenue. The arithmetic a reader can do is about scale: an up-to-$10 billion IPO cheque would equal about 21% of the private holdings line and 40% of the unfunded commitments, which is a large addition to the circular financing book but not a transformative one.
What Nvidia Says About the Circular Financing Charge
Nvidia has answered the circular financing charge several times in ten months, and the answers have moved from disputing the scale to defending it.
November 2025: “a small fraction of revenue”
After investor Michael Burry argued that the AI boom was replaying the telecom bubble, Nvidia circulated a seven-page memo to sell-side analysts, first reported by Barron’s. CNBC reported that the memo rejected Burry’s suggestion of circular financing, saying Nvidia’s strategic investments represented a small fraction of revenue and that AI startups raise capital predominantly from outside investors. Invezz’s account put the memo’s year-to-date strategic investment figure at $4.7 billion. Burry replied: “I am not claiming Nvidia is Enron. It is clearly Cisco.”
August 2026: “missing a very big point”
By Nvidia’s fiscal second-quarter results on 26 August 2026, the argument was no longer that the numbers were small. On CNBC’s Mad Money, Huang said critics were “missing a very big point”, adding: “This is the first generation of startups that needed tens of billions of dollars to get funded.” Of the frontier labs he said, “They’re not investment grade,” and “this is where Nvidia could be helpful.” His conclusion on the circular financing worry was blunt: “I think the risk is low.”
The CFO’s version: “power this flywheel”
Chief financial officer Colette Kress told analysts that Nvidia had invested “nearly $50 billion in the frontier AI labs”, per CNBC, and argued that the labs’ demand for compute was growing faster than their balance sheets and credit profiles could support. “Nvidia is needed to help power this flywheel,” she said. Seoul Economic Daily’s account of the same results reported her describing the investments as a small fraction of expected free cash flow.
How the portfolio grew between the two answers
The shift in tone tracks a shift in size. CNBC’s figures for the value of Nvidia’s equity investments show a portfolio that went from a rounding error to a major balance-sheet line in two years.
| Statement | Date and venue | What it claims | What the record shows |
|---|---|---|---|
| Memo to analysts | Nov 2025, reported by Barron’s and CNBC | Strategic investments are a small fraction of revenue | Equity investments valued at $99 billion by July 2026, per CNBC |
| Huang at Morgan Stanley | 4 Mar 2026 | OpenAI and Anthropic stakes likely the last before their IPOs | Reuters reports talks on an Anthropic IPO anchor stake of up to $10 billion |
| Partnership announcement | 10 Aug 2026 | Compute is “fungible and transferable across customers and operators” | Memorandums of understanding with six firms targeting over $500 billion |
| Huang on Mad Money | 26 Aug 2026 | Frontier labs need capital no startup needed before, and the risk is low | Guarantees capped at $105 billion and $65 billion of cloud agreements in the same quarter’s 10-Q |
| Kress on the earnings call | 26 Aug 2026 | Nearly $50 billion invested in frontier labs | $30 billion in OpenAI and $10 billion in Anthropic account for $40 billion of it |
Where the Circular Financing Argument Is Weakest
A fair reading of the record also turns up places where the circular financing label does not fit, or fits only loosely. They are worth stating plainly, because the circular financing bear case is often argued as if none of them existed.
Outside money dwarfs Nvidia’s at Anthropic
Anthropic raised $30 billion in its Series G and $65 billion in its Series H, and Reuters reports a planned IPO of up to $100 billion. Nvidia’s $10 billion is a third of one round. Even counting the reported anchor, Nvidia’s $20 billion is about 10% of the $195 billion across those three raises. Nvidia’s November 2025 memo made the general version of this argument, that AI startups raise capital mainly from outside investors, and at Anthropic the disclosed figures bear it out.
Demand is not the thing in doubt
Circular financing is dangerous when funded customers buy capacity nobody else wants. Anthropic’s disclosed run rate rose from about $9 billion at the end of 2025 to above $65 billion by the end of July 2026, and Reuters reports that demand for Claude “has strained its available computing capacity”. Burry’s own telecom comparison rests on fibre built far ahead of traffic; he has said less than 5% of US fibre capacity was operational in the early 2000s. Anthropic is buying compute behind demand, not ahead of it.
An IPO price is set by other people
A private round lets the investor and the company agree a price between themselves. An IPO allocation is priced from a book the underwriters build across a large number of institutions, which is close to the opposite of a closed loop. If Nvidia buys at the offer price, it pays what everyone else pays.
Where the defence runs out
The defence is strongest for equity and weakest for guarantees and capacity buybacks, where Nvidia’s exposure grows precisely when outside demand disappoints. A guarantee costs nothing while customers pay and everything when they stop. That distinction, rather than the word circular, is where circular financing risk actually sits.
The Telecom Precedent Behind Every Circular Financing Warning
Every circular financing warning about Nvidia eventually reaches the same comparison: the equipment makers that lent to their own customers at the end of the 1990s.
How much the suppliers lent
CFO magazine’s Ronald Fink put the total at an estimated $25.6 billion extended by nine suppliers, Alcatel, Cisco, Ericsson, Lucent, Motorola, Nokia, Nortel, Qualcomm and Siemens, by the end of 2000. Tomasz Tunguz, compiling TheStreet’s 2001 reporting and Lucent’s filings, lists Lucent’s commitments at $8.1 billion, Nortel’s at $3.1 billion with $1.4 billion outstanding, and Cisco’s at about $2.4 billion. Lucent’s figure was 24% of its $33.6 billion of fiscal 2000 revenue.
How it ended
By March 2003, Fink wrote, 24 of the 30 largest publicly traded telecom service providers were bankrupt, and an estimated one-third to 80% of suppliers’ loan portfolios had been lost. Lucent booked bad-debt provisions of $2.2 billion in fiscal 2001 and $1.3 billion in fiscal 2002, with about $700 million tied to the carrier Winstar, per Tunguz. Lucent and Nortel were, in Fink’s words, “on the brink of insolvency”.
The line from that article that fits 2026 best is about incentives. As one analyst put it to CFO, “when a company begins to rely on the financing part of its operations to generate earnings, its risk profile almost by definition becomes more complex.”
| Measure | Telecom suppliers, 1999 to 2002 | Nvidia, 2025 to 2026 |
|---|---|---|
| Main instrument | Loans to carriers to buy equipment | Equity stakes, capacity buybacks and lease guarantees |
| Largest single exposure | Lucent, $8.1 billion committed | OpenAI-linked guarantees capped at $105 billion |
| Exposure against revenue | Lucent: 24% of a year’s revenue | Guarantee cap: 109% of one quarter’s revenue |
| Borrower credit | Young carriers, most of the largest later bankrupt | Frontier labs that Huang says are “not investment grade” |
| Demand signal | Capacity built far ahead of traffic | Capacity strained, per Anthropic and Reuters |
| Outcome | $3.5 billion of Lucent provisions in two years | Not yet known |
Where the analogy breaks
The differences between the two circular financing eras are real. Nvidia’s equity positions have gained value so far, with CNBC reporting its $5 billion Intel stake worth $30 billion. Its largest guarantee supports a campus for a customer last valued privately at $852 billion rather than a regional carrier, and much of its exposure takes the form of capped commitments rather than loans already drawn. The similarity is also real: in both eras, the lender’s reported growth depended on customers whose ability to pay depended on the lender’s continued support.
Why an IPO Anchor Is a Different Kind of Circular Financing
If Nvidia does anchor the offering, the transaction would differ from its earlier Anthropic investment in three ways that matter for the circular financing debate.
The price is set outside the circular financing loop
In the Series G, Anthropic and its investors agreed the $380 billion post-money valuation privately, in the same season Anthropic signed $30 billion of Azure capacity on Nvidia systems. In an IPO, the underwriters set the price from institutional demand, and no compute contract is reported to be attached to the anchor talks. That makes an anchor purchase at the offer price the least circular kind of equity Nvidia can buy.
The existing stake gets a public price
Nvidia says its private holdings are “carried at cost less impairment, and adjusted for observable price changes.” A listing is about as observable as a price change gets. Our anchor investor report calculated that a $10 billion Series G stake, roughly 2.63% of the company, would be worth about $52.6 billion at a $2 trillion valuation before dilution. An anchor cheque would not create that gain, but a full book would support the price that produces it, and gains on equity securities sit outside revenue.
The money raised is compute money
Anthropic’s IPO proceeds are expected to pay for the compute contracts described above, which serve Claude’s customers and train new models, including through reinforcement learning. Some of that spending will reach Nvidia through Microsoft and Nscale; more of it, on current disclosures, will reach Amazon and Google. An anchor cheque therefore recycles only partly, which is the honest one-line answer to whether this particular circular financing is circular.
| Feature | Series G stake, Feb 2026 | Reported IPO anchor, 2026 |
|---|---|---|
| Who sets the price | Anthropic and its investors, $380 billion post-money | The underwriters’ book |
| Amount | $10 billion | Up to $10 billion |
| Share of the company | About 2.63% | About 0.5% at $2 trillion |
| Compute deal announced alongside | $30 billion of Azure and up to 1 GW of Nvidia systems | None reported |
| How Nvidia carries it | Private holding at cost, adjusted for observable price changes | A listed holding with a daily market price |
| Status | Finalised, per CNBC | Under discussion, per Reuters |
Who Carries the Risk If the Loop Slows
Circular financing risk does not sit in one place. If growth in frontier AI revenue stalls, the exposure lands on four different parties in four different ways.
Nvidia
Nvidia’s exposure is mostly contingent. Its guarantee caps total $108.5 billion, and its cloud agreements total $65 billion. The AI cloud agreements carry a built-in release valve, because the clouds can stop supplying Nvidia and resell the capacity, but that valve only helps if third-party demand exists.
Anthropic
Anthropic’s circular financing exposure is its multi-year compute commitments across AWS, Google, Azure and Nscale. Its revenue growth has so far outrun those commitments. If it slows, the company holds contracts sized for a much larger business, and the IPO proceeds become a cushion rather than an accelerator.
IPO buyers
Public investors take the valuation risk. At around $2 trillion on a run rate above $65 billion, the price is about 30.8 times current annualised revenue, and roughly ten times the $190 billion to $200 billion Reuters has reported as Anthropic’s 2028 projection.
Lenders and neoclouds
The newest risk sits with lenders financing GPUs as collateral through the planned platforms and neocloud debt. Their protection is Huang’s argument that compute is fungible and transferable. Their exposure is the speed at which each chip generation loses value when the next arrives.
| Party | Exposure | What would trigger a loss | What limits it |
|---|---|---|---|
| Nvidia | $47.9 billion of private stakes, $65 billion of cloud agreements, $108.5 billion of guarantee caps | Customer default or falling private valuations | Caps on guarantees; AI clouds can resell capacity |
| Anthropic | Multi-year compute commitments across four suppliers | Revenue growth slower than committed spending | Supplier diversity and IPO proceeds |
| IPO buyers | A price around 30.8 times run-rate revenue | Growth below the reported 2028 projection | Price discovery at the offering |
| Lenders and neoclouds | Credit secured on GPUs and data centres | Faster-than-expected loss of GPU value | Compute that can be moved between customers |
Signals That Separate Circular Financing From Real Demand
The debate will not be settled by argument. It will be settled by a handful of disclosures due over the next two quarters, each of which can distinguish circular financing from ordinary demand.
In Anthropic’s prospectus
The public S-1, which Reuters’ 4 September reporting placed in late September, should include related-party disclosures, supplier concentration and purchase commitments. The ratio of committed compute spending to revenue is the single number that says whether the loop funds itself. As we noted when the Anthropic IPO slipped to mid-October, the calendar leaves little room between filing and pricing.
In Nvidia’s next 10-Q
Nvidia’s filing for the quarter ending 25 October 2026 will show whether unfunded equity commitments rose from $25 billion, whether AI cloud agreements grew past $36 billion, and whether any payment was made under a guarantee. A new commitment of about $10 billion would be visible in the first of those lines.
In the neocloud order books
CoreWeave’s order form obliges Nvidia to buy residual unsold capacity. If Nvidia’s disclosures start to show it consuming more partner capacity than its research needs, that is the clearest sign that outside demand is thinning and circular financing is propping up utilisation.
In the financing platforms
The $500 billion platforms were announced as memorandums of understanding. Named projects, committed dollars and the interest rates charged on GPU-backed credit will show whether outside lenders price Nvidia compute the way Huang describes it, or whether circular financing has simply moved off Nvidia’s balance sheet.
| Signal | Where it appears | Reassuring reading | Worrying reading |
|---|---|---|---|
| Compute commitments against revenue | Anthropic S-1 | Commitments phased behind revenue growth | Commitments far ahead of revenue |
| Related-party terms | Anthropic S-1 | Investor and supplier contracts on ordinary terms | Pricing or capacity linked to investment |
| Unfunded equity commitments | Nvidia 10-Q, October quarter | Stable near $25 billion | Rising sharply with new lab stakes |
| Cloud agreements | Nvidia 10-Q | Flat near $36 billion and $29 billion | Growing faster than revenue |
| Guarantees | Nvidia 10-Q | Still contingent | Any payment made |
| Platform lending | Deal announcements | Named projects at modest spreads | Few projects and high spreads |
What Circular Financing Means for Businesses Buying AI
Most organisations reading this will never buy Anthropic shares. They buy Claude through an API, a cloud marketplace or a subscription, and circular financing reaches them through price, capacity and supplier stability.
Today’s prices carry investor money
When frontier labs are funded through circular financing and record private rounds, the price of a model call reflects capital strategy as well as cost. That tends to favour buyers now. It also means list prices can rise once public shareholders ask for margins, so multi-year terms are worth negotiating while funding is abundant.
Supplier checks now include the supplier’s suppliers
A standard vendor management review asks whether a provider is financially stable. For AI providers, add two questions: who funds its compute, and what happens to capacity if one of those funders pulls back. Our analysis of whether there is an AI bubble sets out the wider warning signs to track alongside circular financing.
Contract terms that reduce exposure
The practical protections are unglamorous: price caps or indexation on renewals, capacity and rate-limit commitments in writing, data export in a usable format, and the ability to route workloads to a second model provider. None of them depends on how the circular financing debate ends.
Frequently Asked Questions About Circular Financing and Anthropic's IPO
Is Nvidia’s investment in Anthropic circular financing?
Partly. Nvidia invested $10 billion in Anthropic’s Series G, and Anthropic has committed to Azure and Nscale capacity that runs on Nvidia systems. But Anthropic’s largest disclosed compute contract, with Amazon Web Services, uses Amazon’s own chips, so much of Anthropic’s spending does not return to Nvidia.
How large is Nvidia’s circular financing exposure?
Its 10-Q for the quarter ended 26 July 2026 shows $47.9 billion of private equity holdings, $25 billion of unfunded equity commitments, $36 billion of AI cloud agreements, $29 billion of cloud service agreements, and guarantees capped at $105 billion plus a further $3.5 billion.
Has Nvidia confirmed it will anchor Anthropic’s IPO?
No. Reuters reported the talks on 11 September 2026, citing people familiar with the matter. Anthropic declined to comment and Nvidia did not immediately respond. The plans remain under discussion and could change.
What happened to vendor lending in the telecom bubble?
Nine equipment suppliers had extended an estimated $25.6 billion to carriers by the end of 2000. By 2003, 24 of the 30 largest public telecom service providers were bankrupt, and Lucent booked $3.5 billion of bad-debt provisions across fiscal 2001 and 2002.
What is Nvidia’s $500 billion financing platform?
A set of memorandums of understanding, announced on 10 August 2026, with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to mobilise over $500 billion of third-party capital for AI infrastructure built on Nvidia hardware, using outside money rather than Nvidia’s own.
References and Further Reading
Exclusive: Nvidia in talks to invest in Anthropic’s mega IPO, sources say (Reuters via AOL)
NVIDIA Corporation, Form 10-Q for the quarter ended July 26, 2026 (SEC EDGAR)
CoreWeave, Inc., Form 8-K on the NVIDIA order form (SEC EDGAR)
Nvidia’s investments grow to $99 billion as chip giant becomes major backer of AI companies (CNBC)
Nvidia lines up $500 billion in financing as Jensen Huang calls his chips an investable asset (CNBC)
Nvidia name-checks Michael Burry in memo pushing back on AI bubble allegations (CNBC)
Jensen Huang says Nvidia is pulling back from OpenAI and Anthropic (TechCrunch)
Nvidia, OpenAI appear stalled on their mega deal. But the AI giants still need each other (CNBC)
Nvidia’s Huang Rejects Circular Financing Claims Over AI Investments (Seoul Economic Daily)
What Are Circular Deals? (Program on Negotiation at Harvard Law School)
Circular Financing: Does Nvidia’s $110B Bet Echo the Telecom Bubble? (Tomasz Tunguz)
Microsoft, NVIDIA and Anthropic announce strategic partnerships (Anthropic)
Anthropic raises $30 billion Series G funding at $380 billion post-money valuation (Anthropic)
Anthropic and Amazon expand compute collaboration (Anthropic)
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