Nvidia Corporation‘s (NASDAQ: NVDA) recent investment in OpenAI has sparked investor concerns that the startup might buy Nvidia chips, creating a “circular” investment loop and raising questions about the move's rationale and potential impact on Nvidia's stock.

Nvidia's OpenAI Deal Sparks Circular Sales Concerns

Stacy Rasgon, an analyst at Bernstein, acknowledged that the OpenAI deal “will clearly fuel ‘circular’ concerns.” These concerns revolve around Nvidia investing in startups that subsequently purchase Nvidia chips, or reselling cloud services built on GPUs sold specifically for that purpose, reported MarketWatch.

Track NVDA stock here

The OpenAI deal has raised concerns, though Nvidia clarified that the investment funds won't be used to buy its own products. The Sam Altman-led company made a major cloud deal with Oracle (NYSE: ORCL), potentially boosting Oracle's Nvidia chip purchases, while Nvidia has also invested in OpenAI.

Bank of America analysts, led by Vivek Arya, project that Nvidia's ...