Surely this is Nvidia deploying excess capital by acquiring equity in high growth companies at significant discounts (factor in that a major portion of the investment comes back to them against their high margin products). This isn't a new business concept and is generally accepted as smart business? Not some breaking news conspiracy?

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musicale 3 hours ago | parent | next [-]

> CFO and acting CEO, Colette Kress ... pushed for a reduction in circular financing agreements,

Reducing circular financing agreements seems like ... a good idea?

> in response to which Huang allegedly lay into Kress, calling her a "deer in the headlights,"

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itemize123 3 hours ago | parent | next [-]

From WSJ below. Seems clear they went too far. But not clear Kress can navigate this.

Over the course of the meeting, he proceeded to tear into the woman who is now taking over for him as Nvidia CEO.

Colette Kress was "a deer in the headlights," he said, interrupting her presentation, according to a person familiar with the comments.

He had summoned Kress and his senior finance team to diagnose a ballooning problem: Nvidia was in talks to provide billions of dollars of guarantees to companies that couldn't afford its chips. That included deals led by Huang's son-in-law, Nico Caprez, who had been offering upstart cloud providers and data-center developers financing in the hopes of turning them into long-term customers.

Huang had launched a dealmaking spree and was now starting to question whether it had gone too far, according to people familiar with the matter.

Kress was a "reporting CFO," not someone who could help him define a strategy or make decisions, Huang said during the August meeting.

	▲	yieldcrv 3 hours ago \| parent [-]
		this is the new off balance sheet transaction I’m so ready this time, CFO at the helm

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loeg 3 hours ago | parent | prev | next [-]

This isn't responsive to GP's remarks.

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musicale 3 hours ago | parent [-]

> a major portion of the investment comes back to them

1. circular financing agreements

2. see 1

	▲	loeg 3 hours ago \| parent [-]
		You’ve now edited the comment I replied to (originally it was just the quote), but it is still not responsive to the OP; nor is your new comment responsive to my earlier criticism.

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colechristensen 3 hours ago | parent | prev [-]

Well that's actually a hopeful sign for the future. I was a bit worried hearing she'd been conservative about investments in the past... but if the conservatism was about vaguely fraudulent circular financing deals we'll all be better off.

	▲	0x4e 3 hours ago \| parent [-]
		Spot on. Maybe that implies some correction of some sort. Especially to their stock and to the beneficiaries of this circular financing. I also feel this is a good thing. Looks like the elephants in the room are being addressed.

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ElProlactin 2 hours ago | parent | prev [-]

> (factor in that a major portion of the investment comes back to them against their high margin products)

One problem is that there isn't one number that indicates what percentage of Nvidia's equity investments come back to it in the form of chip purchases. In some cases, it appears it's 100%; in others, it has been suggested that every $1 invested produces >$3 in revenue. $1 invested for $1 in revenue versus $1 invested for $3 in revenue are really different outcomes.

There are also the questions of the revenue and revenue quality of the companies Nvidia has invested in, how much debt they've taken on, what sort of backstops/guarantees Nvidia has given them, etc.

	▲	derangedHorse an hour ago \| parent \| next [-]
		> One problem is that there isn't one number that indicates what percentage of Nvidia's equity investments come back to it in the form of chip purchases. And why couldn't a single number be calculated for this? They know their portfolio companies, their investment amounts, and the portfolio company purchases of their products. > There are also the questions of the revenue and revenue quality of the companies Nvidia has invested in, how much debt they've taken on, what sort of backstops/guarantees Nvidia has given them, etc. These are generally good things to look at for all corporate investments. The main takeaway is that Nvidia investing in their own customers isn't inherently a bad thing. Investing in a poorly performing company is a bad thing.
	▲	s1artibartfast an hour ago \| parent \| prev [-]
		Sounds like a terrific investment if you get $3 Revenue plus equity for $1 invested. What seems to be the problem?