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What risk did the Andvari letter flag?

Investment firm Andvari Associates said the Nvidia investment in OpenAI is a warning sign for growing circular financing structures in the artificial intelligence ecosystem, raising concerns about sector valuations and credit risk. According to the fund’s second-quarter 2026 investor letter, some capital flows are looping back into chip purchases and rentals, creating a financing chain that could make demand appear stronger than it really is.

The letter said that, in late 2025, much of Nvidia’s investment in OpenAI was expected to be used to lease Nvidia chips. Andvari also noted that companies including Nvidia and Anthropic are making direct investments in special purpose vehicles (SPVs), which in turn are being directed to buy equipment from the same hardware makers.

Another area highlighted by the fund was debt-driven demand. According to the letter, some AI companies are buying chips and servers with billions of dollars in borrowings through private equity-backed SPVs; some Nvidia customers are also using existing Nvidia chips as loan collateral to buy more chips. Andvari compared these patterns with the problems telecom and technology companies faced during the 1990s internet bubble.

How are Nvidia shares and fund interest holding up?

Despite the warnings, NVIDIA shares continue to trade strongly. Data cited in the source showed the stock closed at $217.55 on August 28, 2026. The one-month return was listed at 5.28%, while the gain over the past 52 weeks was 24.90%.

What do the numbers show?

  • The company’s market value was reported at $5.25 trillion.
  • By the end of the second quarter of 2026, the number of hedge fund portfolios holding Nvidia shares rose to 285.
  • That figure stood at 275 in the previous quarter.

The same source said Nvidia ranked fourth on the list of the 40 most popular stocks among hedge funds heading into 2026. The picture suggests that, even as questions grow over financing structures, investor appetite and demand for AI infrastructure remain strong.

Where are the key vulnerabilities in the AI investment cycle?

In its earlier first-quarter 2025 letter, Andvari argued that excessive optimism in artificial intelligence was widening the gap between company valuations and future cash flows. The fund said the AI investment phase could weaken within 1-3 years, even as today’s heavy infrastructure demand continues to attract many new competitors.

The letter also listed overcapacity and aggressive financing as major risk factors. As one example, it pointed to Oracle’s $90-95 billion AI cloud investment push and the downgrade of its credit rating. Andvari said it has therefore limited its exposure to the sector and continues to follow a disciplined investment approach in more stable areas.

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