Nvidia weighs a $20 billion bet on Mercor, its own AI data supplier

Nvidia (NASDAQ: NVDA) wants to put money into Mercor, a company that it buys training data for AI models from. 

The deal could value Mercor at $20 billion, but some experts worry that Nvidia’s “circular financing” could create risks for the financial system.

Is Nvidia funding its suppliers? 

Nvidia is reportedly in talks to invest in Mercor, which sells the training data that AI models are built on and is one of the inputs Nvidia’s customers need to make its chips useful. 

Venture capital firm General Catalyst is discussing leading the funding round. Mercor’s revenue crossed $2 billion in yearly revenue in June 2026. The company made $614 million in the first half of the year. 

Mercor was valued at $10 billion after its Series C round in October 2025. A deal at $20 billion would double that in just nine months. Mercor’s customers already include OpenAI, Google (NASDAQ: GOOGL), and Anthropic. Nvidia pays Mercor to help develop its Nemotron open-source AI models. 

Nvidia also signed deals with Apollo, BlackRock (NYSE: BLK), Blackstone (NYSE: BX), Brookfield, Goldman Sachs (NYSE: GS), and KKR totaling up to $500 billion in order to mobilize money for AI infrastructure. 

Nvidia previously paid to use technology from a chip startup called Groq. It later joined a $350 million investment round that valued the newly restructured Groq at $3.5 billion, about half of what Groq was worth at its peak in September 2025, according to Cryptopolitan. 

Nvidia has also been connecting people who own its graphics processing units (GPUs) with data center operators in the Nordic countries, the United States, and Asia. 

What is circular financing? 

Nvidia has been fingered in circular financing accusations, which happen when a company invests in or lends money to its own customers or suppliers. Those companies then use the money to buy the first company’s products, making revenue look like it comes from real demand when it might actually come from the company’s own money. 

The Bank for International Settlements (BIS) warned about this in its 2026 Annual Report, calling circular financing one of the three biggest risks to global financial stability. The Bank of England also said the pace of AI investment is “unprecedented historically” and heavy debt financing could strain credit markets if companies fail to make a profit. 

Nvidia has backed cloud providers like CoreWeave, Nebius, and Nscale, and now these companies use Nvidia’s money to buy Nvidia’s chips. 

OpenAI also has a $100 billion deal with Nvidia to build data centers using Nvidia chips, with Nvidia guaranteeing some of the loans. Notably, Nvidia’s stock dropped, and its credit default swaps hit record highs in July 2026. 

The company has denied that its strategy of investing in its buyers is circular financing, arguing that its chips are “fungible.” This means they can be sold to other customers if one customer leaves. But a deal with Mercor would mean that they rise and fall together.

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