Jensen Huang once joked during an internal company meeting that Nvidia was “basically holding the planet together,” and it’s not untrue.
He was pointing at memes. The audience laughed. It was funny because it was close enough to true to land.
On July 28, Mark Cuban and Michael Burry were making a version of the same observation. Neither of them was laughing.
What Mark Cuban said about Nvidia and the AI bubble on X
Cuban posted on X after another user described Nvidia (NVDA) as a “backstop” for the AI economy, financing its customers’ purchases of its own chips for their data center buildouts. Cuban read it and agreed, then went further.
“This is so analogous to the dot com burst,” he wrote on X. “But instead of IPOs, Nvidia is the ‘IPO,’ funding everyone and anyone.”
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His argument is that during the late 1990s, the IPO market was the mechanism that kept capital flowing into internet companies that couldn’t justify their valuations on fundamentals. Companies went public, raised money, kept spending. The music played until it stopped. Cuban is saying Nvidia has taken over that role in the current cycle. It’s not just selling chips. It’s financing the purchases of its own chips, which ties its balance sheet to the financial health of the very customers it’s enabling.
“One breakthrough in another chip provider, or a misstep, and it all could crumble,” he wrote. “It’s truly scary.”
What Michael Burry said about Nvidia’s credit default swaps and circular spending
Burry posted the same night. His angle was different from Cuban’s but landed in the same place. Where Cuban focused on the financing dynamic, Burry focused on what the credit markets are saying about it.
“There is a reason $NVDA’s 5 year credit default swaps are going parabolic,” he wrote, attaching a chart showing the cost of buying insurance against Nvidia defaulting on its debts had roughly doubled in two months, according to Business Insider.
“All this overreaching by #nvda to push the circular spending to biblical proportions,” he added.
Burry’s “Big Short” trade was built on credit default swaps. He bought insurance on subprime mortgage bonds during the housing bubble, collected when they collapsed, and made a fortune. When he points to Nvidia’s CDS going parabolic, he’s pointing at something he understands as well as anyone alive. The credit market is pricing in a rising risk that Nvidia can’t service its commitments if the cycle turns. That doesn’t mean it will. It means enough institutional money thinks it might to pay up for the insurance.
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Why Cuban and Burry say Nvidia’s AI financing role is the real risk
The specific concern isn’t just that Nvidia is dominant. It’s that Nvidia is a lender to its own customers. When a chip company finances the purchase of its own chips, it creates a loop. Customers buy more than they could otherwise afford. Nvidia’s revenue looks stronger than underlying demand justifies. The balance sheet of both the customers and the supplier become linked in ways that amplify any downturn.
Burry made this point explicitly in a July 24 Substack post, writing that he had bolstered his Nvidia short and holds bearish put options on the stock. He argued that much of Nvidia’s demand doesn’t come from end customers, much of it is financed and kept off its balance sheet, and “future revenues are majority financed in a circular arrangement.”
Cuban’s data center pickleball court quip from an earlier podcast fits the same frame. His argument is that AI infrastructure is being overbuilt relative to real demand, that efficiency gains will make much of it redundant faster than people expect, and that Nvidia’s financing role is masking how fragile the demand picture actually is.
What Nvidia’s stock decline and CDS surge say about the AI bubble warnings
Nvidia shares were down about 5% on July 27 and closed at $196.51, stripping roughly $250 billion in market cap in a single session and handing the title of world’s most valuable company back to Apple, according to Business Insider. Nvidia has announced more than $540 billion in circular financing deals in 2026 alone, according to Bloomberg, excluding the potential new OpenAI arrangement. The IMF and the Bank for International Settlements have both flagged AI circular financing as a systemic downside risk.
Jensen Huang has called the circular financing criticism “ridiculous.” Nvidia didn’t respond to a request for comment from Business Insider on Cuban and Burry’s specific posts. Huang’s “holding the planet together” line was from an internal November meeting where he was pointing at memes, not making a financial disclosure. But the joke stuck because the dependence it described is real.
Whether that dependence becomes a problem depends on whether AI demand keeps growing fast enough to justify the financing, the buildout, and the valuations. Cuban and Burry are betting, in different ways, that it won’t. The credit markets are quietly starting to agree with them.
Related: Michael Burry sends strong warning on AI development path
