CNBC's Jim Cramer on Monday drew a direct comparison between the current artificial intelligence investment boom and the financing excesses that preceded the dot-com crash, pointing to a reported deal between Nvidia and OpenAI as the latest warning sign.
The Wall Street Journal reported Sunday that Nvidia was discussing a $250 billion backstop for OpenAI that would help finance a planned 10-gigawatt artificial intelligence data center campus in Ohio. CNBC confirmed the report Monday. Nvidia declined to comment. Shares of Nvidia fell more than 4% on Monday, pulling many semiconductor stocks down with it.
The proposed guarantee would support the project's lease and construction debt, not the Nvidia chips that would be deployed inside the facility.
Cramer, the host of Mad Money, said the structure of the deal reminded him of the late 1990s, when telecom equipment makers helped customers finance major purchases to drive their own sales growth. Many of those arrangements unraveled when cash-strapped buyers could no longer pay, inflicting heavy losses on suppliers and investors.
"What we learned in 2000 is that you don't lend to companies who buy your goods," Cramer said.
The Ohio project is part of a broader pattern. Nvidia has invested in several companies that are also major customers for its chips, including a $30 billion investment in OpenAI in March and a $10 billion investment in Anthropic last year. The chipmaker has also backed multiple neocloud providers that rent Nvidia-powered computing capacity to other customers. Nvidia has said those investments support the growth of the AI ecosystem while offering attractive long-term returns.
Cramer said he still views Nvidia as an exceptionally strong company and is not predicting a repeat of the dot-com crash. But he said history shows that investors can quickly lose confidence when suppliers become too reliant on customers whose spending depends on continued access to outside capital.
"If the buyer, in this case, OpenAI, can actually afford to pay for these chips, perhaps because it comes public ... then Nvidia's in terrific shape," Cramer said. "If the buyer can't pay, well, that's a different story."
OpenAI confidentially filed for an initial public offering in June but has not announced a timeline for its public debut. Private investors valued the company at more than $800 billion in March as it works to expand the computing infrastructure needed to power its AI models while competing with Alphabet and Meta.
Cramer said the risks extend well beyond Nvidia because a wide range of companies now depend on continued investment in AI infrastructure.
"There are so many companies counting on the data center for their earnings," he said. "If the market decides it doesn't want to fund any more data centers, and the companies themselves don't have the money, or they don't get paid, then we're back in 2000."
"I lived through 2000," Cramer said. "I don't want the sequel."
OpenAI has not yet set a date for its IPO.
