The excess inventory crisis triggered an internal confrontation that led Chief Financial Officer Colette Kress to take over as interim CEO while seeking to rein in circular financing deals. Kress successfully halved a proposed compute guarantee for OpenAI, cutting the commitment from 8 gigawatts down to roughly 4.25 gigawatts valued at up to $125 billion. Meanwhile, Nvidia approached TSMC to wind down manufacturing orders as cloud giants struggle to deploy the hardware they already purchased. Analysts now warn that tech firms hold hundreds of billions of dollars in idle chips due to power grid constraints and soft end-user demand.
Key points
Cloud providers are developing proprietary processors to actively reduce their dependence…: Cloud providers are developing proprietary processors to actively reduce their dependence on external AI hardware vendors.
Massive infrastructure backstops exposed chipmakers to severe financial risks when downst…: Massive infrastructure backstops exposed chipmakers to severe financial risks when downstream power capacity and software demand lagged.
Executive disagreements over balance-sheet-funded data center buildouts prompted an immed…: Executive disagreements over balance-sheet-funded data center buildouts prompted an immediate transition in corporate leadership.
Sources checked by our analysis pipeline: 1
For the past two years, the narrative around inflated GPU and RAM prices has been the insatiable AI demand eating up wafer at TSMC and every module on Earth must go to AI data centers. However, the narrative is cracking ever since reports of channel stuffing and over commitments came out.
Now with Nvidia’s former CEO Jensen Huang gone, more details are out that corroborate our earlier reports on inflated demand on AI. According to Wall Street Journal, Huang admitted in August that major cloud providers are moving away from Nvidia in favor of in-house chips, leaving Nvidia staring down a massive oversupply of prepaid TSMC silicon and memory that was “coming at him like an ‘avalanche'”.
The WSJ report details a heated clash in August 2026 between Huang and Nvidia’s longtime Chief Financial Officer, Colette Kress, the executive who has now taken over as Nvidia’s interim CEO.
Kress was concerned about Nvidia’s growing financial exposure and wanted to rein in the company’s “circular financing” commitments to cloud providers, and AI companies like OpenAI and Anthropic.
AstraZeneca is cutting 600 jobs in the United States as part of a $1.5 billion cost-saving overhaul. The workforce reduction comes amid broader restructuring efforts by the pharmaceutical company to reduce expenses.
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