Nvidia makes the graphical process units (GPUs) that computer technology needs. The current earnings call turned out to be positive enough. but the industry structure it reveals has begun to worry many:

At Futurism, Victor Tangermann reports,

Many AI companies have a problem, in the form of an astronomical gap between sky-high valuations and relatively meager revenues. In a sense, Nvidia is more grounded: it builds the physical chips that those companies use to power their AI models, meaning that if there’s an AI gold rush, it’s selling shovels.

That’s worked out well for Nvidia, which hit an unprecedented $5 trillion valuation last month. But it also means that if Nvidia is in trouble, the rest of the AI industry is also in deep trouble — and, as if those stakes weren’t high enough, the untold tens of billions of dollars being poured into data center buildouts are increasingly propping up the remainder of the US economy, meaning that if Nvidia starts to falter, virtually everyone else could be negatively affected.

Essentially, many of the world’s most powerful business leaders are going all-in on AI — while critics say it’s a house of cards that could come down if one load-bearing piece falls out.

The economic underpinnings remain largely theoretical.

“The Whole Financial World Is Terrified of Nvidia’s Earnings Call,” November 18, 2025

Yes, that’s the problem. It is all theoretical. Gary Smith, writing at MarketWatch, notes this about the hottest AI firm: “OpenAI’s most promising revenue sources are from three harmful addictions: (1) students using GPT to cheat their way through school; (2) people carrying around AI buddies that give them companionship and life advice, and (3) “verified adults” interacting with a (forthcoming) erotic GPT. Even these addictions are unlikely to justify OpenAI’s intended massive expenditures.”

Creating and catering to psychological addictions is not like selling shovels, or can openers or batteries. It’s much more bubble-prone. From Tangermann:

Now, the market clearly has jitters. Nvidia alone, which should be the most secure in the AI industry, has lost hundreds of millions in market cap over the last week. The company’s shares are down over seven percent in the past five days and more than three percent on Tuesday alone, indicating a nervous market ahead of Wednesday’s call. “Nvidia’s Earnings Call”

Technology consultant Jeffrey Funk wrote a good short piece on that problem here yesterday. It’s a problem, he warns, that financial media do not even clearly understand. Thus, there may be no warnings for some upcoming events.