Mark Cuban Compared Nvidia to a Dot-Com-Era IPO Machine "Funding Everyone and Anyone." Here's What That Means for AI Stocks.

Mark Cuban recently raised concerns about how the artificial intelligence (AI) boom is being financed. In a July 28 post on X, he described Nvidia (NASDAQ: NVDA) as the sector's IPO, "funding everyone and anyone."

Cuban was not suggesting that Nvidia literally takes companies public. He was comparing Nvidia's role with the dot-com boom, when IPOs gave young internet companies money to expand. Nvidia is now investing in AI model developers and cloud operators, as well as other companies supporting the wider AI market.

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Nvidia's financing role is becoming significant

Nvidia exited the first quarter of fiscal 2027 (ending April 26, 2026) with $42.3 billion of private investments and another $27 billion of contingent investment commitments. Nvidia's wider investment portfolio includes model developers OpenAI and Anthropic, cloud operators CoreWeave (NASDAQ: CRWV) and Nebius Group (NASDAQ: NBIS), and technology suppliers such as Intel, Synopsys, Nokia, and Coherent.

Some of these investment deals could benefit Nvidia twice. Nvidia's investment may rise in value, while the company receiving the money may buy more Nvidia technology. But that link is not automatic. Several investments are also supporting suppliers and technology partners, not just customers. Therefore, its investment portfolio alone does not show that Nvidia is creating its own sales.

Impact on AI stocks

Cuban's warning is not a blanket argument against AI stocks. Large cloud providers and profitable AI chip and networking players can fund much of their spending from existing operations. A slowdown in data center construction could reduce their free cash flow, orders, or valuations, but it would not immediately threaten their ability to operate.

The warning matters most for companies that need regular outside funding to keep expanding. Specialized cloud operators face greater risk.

CoreWeave generated nearly $2.1 billion in revenue but spent $6.8 billion on capital expenditures in the first quarter of 2026 (ending March 31, 2026). Nebius shows a similar gap, with $399 million in revenue and nearly $2.5 billion in capital expenditures in the first quarter.

Demand is not necessarily the problem. CoreWeave exited the first quarter with a $99.4 billion revenue backlog, while Nebius had nearly $4.8 billion of deferred revenue. The challenge is funding the GPUs and data centers needed to deliver that future revenue before much of the cash comes in.

Iren (NASDAQ: IREN) is also a close Nvidia partner, but Nvidia has not yet made the full agreed-upon $2.1 billion investment. Instead, Nvidia has the right to purchase up to 30 million Iren shares at $70 each, subject to certain conditions.

Iren faces a similar timing issue at an earlier stage. The company generated $144.8 million of revenue in the third quarter of fiscal 2026 (ending March 31, 2026). But the company spent about $1.36 billion on computer hardware, property, and equipment.

Hence, Nvidia's stake in these companies is only part of the story. The bigger issue is whether they can eventually fund expansion with cash from their own businesses. Companies that still depend on external financing could face slower growth if funding becomes harder to obtain.

Manali Pradhan, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Coherent, Intel, Nvidia, and Synopsys. The Motley Fool has a disclosure policy.