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Ed, reading thru seems to imply that Nvidia is simultaneously selling chips before they're made and also "warehousing" (by whom?) brand new, unopened GPUs. Aside from the fact that these two narratives directly contradict each other, wouldn't those have to show up somewhere on the balance sheet?

I'm able to track the warehousing claim but don't quite see the selling unmade chips, besides the preorder campaign statement. I can't speak to what Ed thought, but the implication is that (if Nvidia sold them but that they couldn't be installed they'd be capital assets on the purchasers' books?

ESG Hound

@esghound.com

I think we've def seen examples of proactive purchases that will be accepted prior to data center startup but that's normal/expected given stated demand from customers. If the chips don't have a path to get plugged in then this is channel stuffing and will fall apart in no time

12/5/26, 10:39 pm0 reposts0 likes

Mmm, makes sense. I think that channel stuffing is the broader idea, though the term that the article uses ("bill-and-hold") seems like a very specific form where NVDA warehouses the asset after sale to the customer. I don't see much evidence that this specific "bill-and-hold" concept is being used?

ESG Hound

@esghound.com

Yeah he links to another blog but not sure. I think the problem is granularity because for a company of this size, some of both behaviors will happen. They have 200+ bln in sales, some customers will not plug in chips til later some will pay before delivery! It's meaningless unless it's at scale

Right - it seems like it's a specific claim about billing and delivery practices ("NVDA is selling GPUs and then storing them for customers") that's a claim beyond the core premise which I read as being channel stuffing that can be materialized in a bunch of different ways.

It seems like "bill-and-hold" is an overspecialized claim; from the outside, the asset would seem to pass from NVDA's books to the customer's and then we'd have functionally no visibility into who physically had possession of the GPUs because storing GPUs is much easier than turning them on is?