![\"Nvidia](\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2025\/11\/Main-Nvidia_1764107185160_1764107198195.png\" "\\"Nvidia")
Nvidia has almost $19.8 billion worth of unsold chips, and that\u2019s up significantly in 3 months <\/p>\nThe numbers simply don\u2019t add up. And that is enough to warrant a temporary departure from the standard Neural Dispatch format, for this week. On November 20, Nvidia reported number for the third quarter fiscal 2026. Record revenue of $57.0 billion, up 22% from Q2 and up 62% from a year ago, the tech giant says. \u201cBlackwell sales are off the charts, and cloud GPUs are sold out. Compute demand keeps accelerating and compounding across training and inference \u2014 each growing exponentially. We\u2019ve entered the virtuous cycle of AI. The AI ecosystem is scaling fast \u2014 with more new foundation model makers, more AI startups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once,\u201d says Jensen Huang, founder and CEO of NVIDIA. If you look at just this summary (as most of you would, with limited attention spans, you\u2019d be impressed).<\/p>\n
Nvidia has almost $19.8 billion worth of unsold chips, and that\u2019s up significantly in 3 months <\/p>\n
But it was the Wall Street that read between the lines, and the Nasdaq as well as S&P 500 slid\u2026and then kept sliding. A snapshot \u2014 Dow was down 0.8%, S&P 500 down 1.6%, and Nasdaq down 2.2% on the day. There was much more to Nvidia\u2019s earnings, which I\u2019ll attempt to summarise to save you time (and re-emphasise that to call this AI conversation a \u201cbubble\u201d wouldn\u2019t exactly be out of place).<\/p>\n
The bottomline is, the same pile of dollars are being circulated between different AI companies, hand holding each other in the hope that the bubble isn\u2019t discovered, and gets counted as revenue at each corporate stop this wad of cash makes on its journey.<\/p>\n
American investor and hedge fund manager Michael Burry made a rather blunt post X after Nvidia\u2019s earnings release. He wrote, \u201cThe idea of a useful life of depreciation being longer because chips from more than 3-4 years ago are fully booked confuses physical utilisation with value creation. Just because something is used doesn\u2019t mean it is profitable.\u201d He pointed out that airlines keep old planes around and in service, which come in handy during the festive period rush, but they are only marginally profitable. The reality is, Nvidia\u2019s CFO had pushed back on the GPU accounting (which I\u2019ve explained above) and in a statement said the useful life of Nvidia\u2019s GPUs is a significant total cost of ownership advantage over rivals \u2014 and points to A100 GPUs that were shipped 6 years ago still being utilised at full capacity by customers. But it isn\u2019t that simple. The A100s consume as much as 3x more power per compute (the unit is FLOP, or Floating-Point Operations Per Second) than the H100s that followed it. And that in itself is approximately 25x less power efficient than Blackwell generation chips. A debate is raging \u2014 should depreciation be 3 years, 5 years, or 7 years? Compulsion more than choice?<\/p>\n
THINKING<\/strong> \u201cWe\u2019re doing a 500 megawatts, gigawatts\u2026It\u2019s going to cost eight bazillion trillion dollars.\u201d – Elon Musk, at the U.S.-Saudi Investment Forum 2025<\/p>\n With Elon Musk, it is difficult to know if he was genuinely confused, or it was just an artificially induced fog. But this was Musk, introducing xAI\u2019s planned 500 MW AI data centre partnership with Saudi Arabia. And of course, this is powered by Nvidia, which is why CEO Jensen Huang was almost sweating when he said \u201cstop it\u201d as Musk stumbled between megawatt and gigawatt. Not a casual occasion to stumble, for the man who many believe is the saviour of humanity (of course that mission will also be powered by Nvidia, but I digress).<\/p>\n![\"\"\/](\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2025\/10\/quoteText.png\")
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