CK Capital
Defense/Space/Tech/Photonics Investor, Co-Owner of CV Research
Open models favor Nvidia because companies running their own models need their own GPUs. Nvidia has already invested about $800 million in Reflection AI, which just launched Beam and is due to release its weights this month. Buying Reflection AI would not be a crazy idea; Jensen Huang keeps backing it strongly. x.comÂ
The most bullish number in Nvidia's results was not revenue but supply commitments, which jumped from $119 billion to $279 billion, mainly for memory, per the CFO. That is $160 billion of new, mostly non-cancellable obligations in one quarter, locking in components for the next several years, and it shows where the shortage is: SK hynix says it is sold out past 2030, and Micron has customers committing through the decade. Every dollar of that lands on a supplier's income statement. x.comÂ
More open-weight models benefit Nvidia as greater AI adoption requires more compute. They bring more competition for OpenAI and Anthropic, putting pressure on pricing and making AI more accessible; the Financial Times reports Nvidia is in talks to acquire Reflection AI. x.comÂ
Buying Reflection AI would give Nvidia a competitive American open model, leaving it unhurt even if Chinese customers stop buying its chips. The FT reports that Nvidia is in talks to acquire Reflection. Reflection's chart shows Beam has 23B active parameters, leads its SWE Bench Verified comparison, beats Nvidia's Nemotron there and is within striking distance of Qwen and GLM on the shown benchmarks. x.comÂ
Low Anthropic spending relative to customer expenses points to an enterprise AI adoption gap that leaves Nvidia reliant on intermediaries able to build their own chips. Anthropic's S-1 says over half the Fortune 500 were $100k+ annual customers as of September, yet spending among its publicly traded customers averaged under 0.1% of expenses in Q3 2026. That measures one provider and cannot show whether AI deployments succeed; Nvidia needs more enterprises buying its compute directly. x.comÂ
NVIDIA's free-model plan could defend chip demand as the two largest AI labs cut reliance on its hardware. OpenAI is building a chip with Broadcom; Anthropic mostly uses Google and Amazon chips. NVIDIA is putting together Reflection AI (in talks), Hugging Face and Groq for free models and paid chips. At 11x expected 2029 earnings versus ~19x for Microsoft, Alphabet and Amazon and 32x for Apple, its price reflects fears of slower AI spending and lost customers. NVIDIA is a 'Maximum Opportunity'. … Show more
NVIDIA's buybacks could lose out to circular GPU financing if it buys Reflection AI. A $6B Reflection commitment to SpaceX could help it raise $40B in debt and pay NVIDIA $30B for GPUs; per @DV_Memetics, the existing compute contract is for up to $6.3B and can end on 90 days' notice. NVIDIA still looks worth owning despite this ugly risk: next year's $700B revenue and nearly $350B FCF are expected alongside a 14x forward P/E. If buybacks cannot reach 80% of FCF, owning it makes no sense. x.com … Show more
Nvidia's AI profits are real, but its compute demand depends heavily on fragile venture funding. Per Chamath, 1% of firms account for 90% of AI spending, and 72 cents of each dollar comes from unprofitable VC-backed firms. Venture money passes through startups to Nvidia and cloud suppliers; if the next raises fail, concentrated orders could contract together. x.com x.com x.comÂ
Open-weight models broaden demand for AI infrastructure despite compressing frontier-model margins. After DeepSeek R1, Tencent, Alibaba and ByteDance significantly increased Nvidia H20 orders, while smaller firms bought H20s for in-house use. Dell's AI customer count rose from over 5,000 to over 6,500 last quarter, roughly 30%, mainly on enterprise acceleration per management; its neocloud, sovereign and enterprise customers offer a read on self-hosting demand. x.com x.comÂ
Nvidia gets paid for AI infrastructure while the companies funding AI buildouts bear the spending. Alongside Apple's edge hardware business, Nvidia's position as a supplier distinguishes it from the AI spenders that are losing to companies collecting the cash. x.comÂ
Nvidia's funding of future customers in Germany further blurs how much chip demand it paid for itself. Jensen Huang said Nvidia invested almost $1B there in the last year and is investing in four more companies this week; German taxpayers are helping too. Finding buyers beyond Big Tech is smart, but the more sales come back from Nvidia's own checks, the harder genuine demand is to gauge. x.comÂ
The broad AI trade is among the most undervalued markets in years on a growth-adjusted basis because demand for intelligence keeps rising. Usage of open-weight and closed frontier models keeps climbing, while GPU rental prices are up around 80% this year despite exploding supply. Nvidia, AMD and SpaceX share this demand bet as long as both lines keep rising. x.comÂ
