Nvidia is promoting its $500 billion order book as concrete proof that its $5.05 trillion valuation is justified. But as the “boom or bust” debate rages, skeptics are questioning if even this staggering number is a true signal of demand or just part of the hype.
The “boom” argument is powerful. A half-trillion-dollar backlog, combined with a $1 trillion value increase in three months and a $100 billion OpenAI deal, paints a picture of a company that cannot build chips fast enough to meet a world desperate for AI.
This narrative is further supported by partnerships with major players like Uber, Nokia, and the US government, as well as high-profile support from President Trump. For the bulls, the $500 billion in orders is the foundation.
However, the “bust” argument, supported by warnings from the IMF and Bank of England, suggests this foundation is shaky. Skeptics question the quality of these orders. They ask: how much of this demand is speculative?
The biggest concern is the “last mile” of AI implementation. If, as analysts warn, “nearly all AI pilot programs in businesses fail,” then the companies placing these massive orders may never see a return on their investment. This could lead to cancellations and a sudden collapse in demand, proving the $5T valuation was a bubble all along.