Nvidia bankrolled its own GPU customers as an 'avalanche' of TSMC wafers loomed, WSJ reports

The charge: a shortage Nvidia financed

Nvidia▼−3.21% — Nvidia, down 3.21 percent today said on Thursday November 12 that Jensen Huang had resigned as president and chief executive, handing the company to finance chief Colette Kress as interim chief ¹. The exit came days after he admitted an affair with an alleged Chinese spy ¹.

That evening, the Wall Street Journal reported that at an August meeting Huang told his senior finance team the wafers and memory Nvidia had committed to buy from Taiwan Semiconductor Manufacturing▼−2.68% — Taiwan Semiconductor Manufacturing, down 2.68 percent today Company, the world's largest contract chipmaker, were "coming at him like an avalanche" ²³. The trigger, per the report, was the biggest cloud providers moving to chips of their own ²³.

The fix: finance the buyers instead of cutting prices

His fix was to finance AI startups and small cloud providers that could not afford its GPUs, keeping the surplus moving instead of forcing prices down ³⁴.

Nvidia's filings show the machine's scale: $99 billion of investments and $36 billion of cloud-service commitments, arrangements that help AI cloud operators finance the GPUs they buy from Nvidia ¹. Kress pushed to rein in that circular financing, helped cut a proposed OpenAI backstop from up to $250 billion to about $125 billion, and was called "a deer in the headlights" for it ³⁴.

The market takes the short side

The claim found its crowd in hours. Reddit's▼−2.11% — Reddit, down 2.11 percent today r/stocks thread drew 4,337 points and 647 comments by November 14 ⁵. A Taiwan Stock Exchange short-interest weekly dated November 13↗ put TSMC among its five highlighted names, inside a $41.7 billion aggregate short book ⁶.

The price had already moved. Taiwan's regulator cut the daily intraday short-selling limit from 30 percent to 3 percent, effective November 9 ⁷. TSMC's New York shares closed Friday at $398.73, about 18 percent below October's high of $487.47, after a near-11 percent single-day fall on November 5 ⁸.

The filings answer with bigger numbers

TSMC keeps posting the opposite of a demand problem. October revenue was NT$586.89 billion↗, about $17.9 billion, up 59.7 percent from a year earlier: its biggest month on record, and roughly a third of its fourth-quarter guidance in a single month ⁷⁹. Quarterly revenue has more than doubled since late 2023 ¹⁰.

Customers had prepaid NT$234.2 billion to hold capacity as of June 30, and the portion booked more than a year out had more than doubled to NT$92.4 billion ². The board had already approved up to $1 billion of stakes in AnthropicPVT$350B — Anthropic, private, latest valuation $350B and OpenAIPVT$1.18T — OpenAI, private, latest valuation $1.18T, as The Inference reported on November 10; what is new this week is the claim that part of the demand underneath those orders was Nvidia's own money ³⁴⁹.

The same money turns up in Anthropic's IPO

Anthropic, the AI developer whose IPO prospectus↗ says the world's most advanced chip manufacturing sits "primarily at TSMC," prices its shares on November 18 and starts trading the next day ¹¹¹². Seven companies are buying $26 billion of its stock at the IPO price: Nvidia, AMD▼−10.90% — AMD, down 10.90 percent today, Broadcom▼−6.53% — Broadcom, down 6.53 percent today, Google, Micron▼−4.50% — Micron, down 4.50 percent today, Microsoft▼−0.28% — Microsoft, down 0.28 percent today and TSMC's vehicle ¹¹¹². Nvidia, the company accused of manufacturing demand, is one of the seven, on top of $10 billion already invested in Anthropic ¹.

Why the two stories have not collided

October counts wafers shipped and paid for ⁷; the avalanche is a claim about orders not yet placed ³. Nvidia was TSMC's largest customer in 2025, at 19 percent of revenue, or NT$727.0 billion, up from 12 percent a year earlier ².

Nvidia's inventory has since more than quadrupled, to $31.6 billion ². The report says Nvidia has already contacted TSMC about winding down coming orders ³; Taiwan's Commercial Times says custom-chip customers would take any capacity freed up, which TSMC has not confirmed ². What would settle the argument does not exist: no public number says how many wafers the Nvidia-funded clouds absorb, and the avalanche is one newspaper's account of one private meeting ²³.

The readings land within days

Nvidia reports on Tuesday November 17, Kress's first earnings call as interim chief, where the test is whether inventory and supply commitments keep climbing ¹². TSMC's November sales follow in early December; its mid-January fourth-quarter report brings the first 2027 outlook and the capital-expenditure budget ²⁹.

The tell is capital expenditure: $60 billion to $64 billion held for 2026 says the order book is real, and a cut gives the avalanche a date ⁸. Chief executive C.C. Wei says demand "is still far above our capability today to supply," while planning 2027 prudently ⁹. Against that, TSMC's customers have NT$234.2 billion of prepayments already on the books ².