Goldman Sachs have a warning against Nvidia 's multibillion-dollar investments in companies like OpenAI and Intel . An analyst from the investment banking company has suggested that some of this revenue surge may not be entirely organic. Nvidia has committed major investments, including up to $100 billion for OpenAI and an additional $5 billion for Intel. These investments are contributing to a massive demand for Nvidia's chips. However, in a recent note Goldman Sachs analyst James Schneider (seen by Benzinga) stated that Nvidia's equity financing to customers is starting to resemble “circular revenue.” The analyst believes that investments flow out as funding, and the returns are realized via GPU sales, effectively inflating reported growth.
Referring to Nvidia’s deal with OpenAI, the report explained the trend, where the chip maker expects to earn about $13 billion in revenue from the AI startup in 2026, and around $10 billion of that profit will be put back into the business.reinvested back into the company. It’s like a food supplier giving money to the same restaurants that buy its ingredients.
“When equity investment comes from a supplier, additional scrutiny is warranted," Schneider said, especially when the same money is circulated back through business deals between the companies.
What Goldman Sachs analyst predicted about Nvidia and OpenAI
Goldman Sachs sees Nvidia’s investments as more than just financial decisions. The company sees these investments as strategic actions that tie developers more closely to Nvidia's CUDA software, increase sales of its hardware, and influence how the AI market develops.
“These deals signal Nvidia's view on the scale of the opportunity. They reinforce market leadership,” Schneider added.
The company also expects Nvidia's datacenter revenue to come from a wider range of customers beyond Big Tech companies like Google-parent Alphabet, Meta and Amazon. More income will come from AI startups and government buyers, groups that are less stable and rely heavily on outside funding, the analysis claimed. While traditional Big Tech companies remain Nvidia's most reliable customers, government-backed national AI programs are increasingly driving demand from countries.
Meanwhile, Goldman estimates OpenAI will need $35 billion in 2026 just for the computer hardware needed to run and train its AI systems. This funding is expected to come from three places: $17 billion from OpenAI's own earnings, $10 billion from Nvidia investments, and about $9 billion from other investors or loans.
However, the financial pressure increases significantly when considering longer-term obligations, including $60 billion for Nvidia-backed data centers and $19 billion for Stargate infrastructure. In total, OpenAI could need $114 billion in cash for 2026 alone.
This means a funding shortage of $62 billion, even after using $17 billion in available cash which is raising serious questions about whether Nvidia's customers can sustain their current spending levels.
Morever, startups like OpenAI have smaller profit margins. The analysis predicted that they're much more affected by changes in investment markets which will make it harder for them to keep spending consistently.
“The sustainability of OpenAI’s infrastructure spending will increasingly depend on equity & debt financing. We believe it will increasingly need to rely on equity/debt raises — with up to ~$75bn in 2026 alone,” Schneider explained.
Referring to Nvidia’s deal with OpenAI, the report explained the trend, where the chip maker expects to earn about $13 billion in revenue from the AI startup in 2026, and around $10 billion of that profit will be put back into the business.reinvested back into the company. It’s like a food supplier giving money to the same restaurants that buy its ingredients.
“When equity investment comes from a supplier, additional scrutiny is warranted," Schneider said, especially when the same money is circulated back through business deals between the companies.
What Goldman Sachs analyst predicted about Nvidia and OpenAI
Goldman Sachs sees Nvidia’s investments as more than just financial decisions. The company sees these investments as strategic actions that tie developers more closely to Nvidia's CUDA software, increase sales of its hardware, and influence how the AI market develops.
“These deals signal Nvidia's view on the scale of the opportunity. They reinforce market leadership,” Schneider added.
The company also expects Nvidia's datacenter revenue to come from a wider range of customers beyond Big Tech companies like Google-parent Alphabet, Meta and Amazon. More income will come from AI startups and government buyers, groups that are less stable and rely heavily on outside funding, the analysis claimed. While traditional Big Tech companies remain Nvidia's most reliable customers, government-backed national AI programs are increasingly driving demand from countries.
Meanwhile, Goldman estimates OpenAI will need $35 billion in 2026 just for the computer hardware needed to run and train its AI systems. This funding is expected to come from three places: $17 billion from OpenAI's own earnings, $10 billion from Nvidia investments, and about $9 billion from other investors or loans.
However, the financial pressure increases significantly when considering longer-term obligations, including $60 billion for Nvidia-backed data centers and $19 billion for Stargate infrastructure. In total, OpenAI could need $114 billion in cash for 2026 alone.
This means a funding shortage of $62 billion, even after using $17 billion in available cash which is raising serious questions about whether Nvidia's customers can sustain their current spending levels.
Morever, startups like OpenAI have smaller profit margins. The analysis predicted that they're much more affected by changes in investment markets which will make it harder for them to keep spending consistently.
“The sustainability of OpenAI’s infrastructure spending will increasingly depend on equity & debt financing. We believe it will increasingly need to rely on equity/debt raises — with up to ~$75bn in 2026 alone,” Schneider explained.
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