American billionaire Mark Cuban calls Nvidia a more 'scary problem' than Oracle

American billionaire and entrepreneur Mark Cuban sounded the alarm on Nvidia’s sprawling web of AI financing comparing it to the dot-com bubble. According to a report by Business Insider, in a post shared on social media platform X (formerly known as Twitter) Cuban said Nvidia has effectively become the “IPO” of the AI boom, funding “everyone and anyone” by backstopping customers’ purchases of its chips for data centers. “As far as Nvidia subsidizing everyone. You are right on. But that feeds the credit problem, far beyond oracle. You never know where an exogenous change is going to come from. This is so analogous to the dot com burst. But instead of IPOs, Nvidia is the “IPO” , funding everyone and anyone. One breakthrough in another chip provider, or a misstep, and it all could crumble. It’s truly scary,” wrote Cuban in a post.Trillions at riskCuban also suggested that Nvidia’s deep entanglement with its customers could trigger widespread fallout if the company falters, potentially wiping out trillions in market value. His comments came as Nvidia shares fell 2% on July 29, down 18% from their May peak, though still up more than 13-fold since early 2023. Michael Burry’s ‘bibical’ warning America’s biggest investor, Michael Burry also echoed Cuban’s concerns. He noted that Nvidia’s five-year credit default swaps have surged in price, signaling rising fears of default risk. “All this overreaching by #nvda to push the circular spending to biblical proportions,” Burry wrote, highlighting the dangers of Nvidia’s financing-heavy model.Nvidia CEO Jensen Huang has acknowledged the company’s central role in the AI boom, joking in November that Nvidia is “basically holding the planet together.” The chipmaker has struck deals worth hundreds of billions with OpenAI, Microsoft, CoreWeave, and SK Hynix, underscoring its dominance in AI infrastructure.Mark Cuban’s blunt message to AI companiesRecently, Mark Cuban hared a blunt message for the world’s leading AI companies: start spending billions directly on the people most affected by AI. In a post shared on social media platform X (formerly known as Twitter) Cuban said that firms like Microsoft, Google, OpenAI and Anthropic are losing the public relations battle and they need to invest in towns and cities facing job losses due to automation. Cuban warned that the AI companies are “getting a lot of hate” and must put people first. “Billions of dollars is a lot of money across towns and city programs. Across the major LLMs, it’s a cost of doing business,” he wrote. “One thing I have learned is being hated is not good for business.”He also criticised the companies for failing to support workers and creatives, saying that every artist he knows is terrified about AI’s impact on their profession. Cuban also argued that AI leaders to meet with artists in Los Angeles and New York face-to-face to provide financial and creative backing rather than paying celebrities for endorsements, which he called ‘dumb’.Get the latest technology news and updates. Download the TOI App.