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Nvidia Will Backstop $250 Billion So OpenAI Can Buy Nvidia's Chips. Michael Burry Is Shorting It.

The Loop

By Beck · 2026-07-27 · 4 min read

Okay so here's the deal, and stick with me because it goes in a circle and then it keeps going.

On July 26, the Wall Street Journal reported that Nvidia is in talks to guarantee roughly $250 billion in financing for a giant OpenAI data center in southern Ohio. Not build it. Not staff it. *Backstop the loan.* On top of that, Nvidia's reportedly in discussions to finance up to $350 billion of the chips OpenAI would buy — from Nvidia. Total project: north of $500 billion. For one 10-gigawatt campus being developed by SB Energy, a SoftBank subsidiary, with the first ~800 megawatts supposedly humming by 2028.

Read that again slowly. The chip company guarantees the money so the AI company can buy the chip company's chips. The snake found its own tail and ordered seconds.

“Around and around we go. That's not me being clever — that's literally what Michael Burry said.”

The guy from the movie is shorting again

Burry — yeah, that Burry — disclosed and expanded a short position on Nvidia in a Substack post on July 24, then posted on X: "Around and around we go. Nvidia to guarantee $200 billion of ChatGPT's spending on $NVDA chips." When the man who called 2008 starts narrating your data center like it's a haunted house, you at least check the exits.

There's even a name for the vibe: circular financing. It's when the chipmakers and cloud guys invest in the AI companies, who then spend that same money buying the chipmakers' and cloud guys' products, which makes everyone's revenue look enormous. Analyses this year clocked more than $800 billion of these arrangements threaded through the AI supply chain. The Bank for International Settlements flagged it as systemic risk in its 2026 annual report. Bernstein's Stacy Rasgon saw it coming back in September 2025, when the first $100 billion OpenAI letter of intent dropped, and basically said: this is going to fuel circular concerns. It did. It's fueling them right now.

Or maybe the debt markets just said no

Here's the less cosmic read, which is somehow more unsettling. One outlet framed the $250 billion guarantee as proof the regular debt markets took a look at a data center that doesn't fully switch on until the 2030s and politely declined. So Nvidia stepped in to co-sign. When your friend needs a co-signer for the apartment, you love your friend, but you also notice the landlord already ran the numbers.

Reuters, for what it's worth, said it couldn't immediately verify the report. Nvidia, OpenAI, and the Commerce Department all did the corporate equivalent of leaving you on read. OpenAI, by the by, is carrying an $852 billion valuation while this is happening. Numbers stopped meaning things a while ago. We're just vibing near a decimal point now.

What any of this has to do with you

Nothing, and also everything. You don't have to figure out whether the money is real to notice that the actual product — the models — keeps getting cheaper and better while the financing gets weirder. ChatGPT, Claude, Gemini, Grok — they're all fighting to answer your question for basically nothing, no matter who's guaranteeing whose loan.

So let the giants play their loop. You can just... use the good part. Put GPT-5.2, Claude, Gemini, and Grok in one room and see which one actually earns it on your questions. Compare the top AI models side by side on Gangsta AI — no co-signer required.

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