The GPU Purgatory Problem

In Nvidia's latest earnings call, the company acknowledged something remarkable with a straight face: "Some will refer to this as circular financing." They then insisted it was actually a "virtuous cycle"—not a circle, they clarified, because cycles are different from circles. Steve Burke of GamersNexus, sitting down with host Ed Zitron on Better Offline, paused the call when he heard that. "I genuinely had a moment where I just sat there like, oh, this is gonna be really bad when it goes."

The phenomenon Nvidia was trying to describe—and spin—is straightforward: the company invests in customers or provides residual guarantees on data center equipment, effectively lending them the money to buy Nvidia's own products. Those customers then use that financing to purchase GPUs that, in many cases, never get plugged in. Zitron has been tracking this for months, and the numbers are staggering. Microsoft, as of a few months ago, had less than two gigawatts of AI capacity online, almost entirely H100s and H200s. That means most Blackwell chips sold in 2025 have gone nowhere. An analyst cited by the FT recently estimated that 50% of chips sold this year and next have nowhere to go.

Where the GPUs Actually Are