$5.05 Trillion: Nvidia’s Valuation Sparks “Circular” Logic Debate

Nvidia’s $5.05 trillion valuation is now the focal point of a debate over “circular” logic. Skeptics are warning that the AI market is inflating itself, while bulls insist the growth is real, creating a stark “boom or bust” scenario.
The “boom” argument is based on massive, tangible numbers. The chipmaker’s value grew by $1 trillion in just three months. It has a $500 billion order book and high-profile partnerships with Uber, Nokia, and the US government, plus support from President Trump.
The centerpiece of the “boom” is the $100 billion deal with OpenAI, which bulls see as proof of a new, AI-first economy.
However, “bust” proponents, including the IMF and Bank of England, see this very deal as the problem. They’ve labeled it “circular,” suggesting it’s a financial feedback loop—AI companies using investor money to buy chips, which drives up Nvidia’s value, which justifies higher AI company valuations.
This skepticism is rooted in the lack of real-world profits. Analysts warn that “nearly all AI pilot programs in businesses fail.” If the only “customers” are other parts of the “bubble,” the entire $5T structure is at risk of collapse.