Is NVIDIA the new Cisco? 🌐🚀

Cisco was the titan of 2000 because they made the network equipment necessary to build the internet. At that time, the web's infrastructure didn't exist yet. Fast forward to 2025: NVIDIA makes AI chips, and the AI infrastructure is equally undeveloped. The world’s reliance on Cisco back then was just as critical as its reliance on NVIDIA today.

In the 90s, Cisco was the "plumber" of the internet. If you wanted to go online, you bought their hardware. By 2000, they were the most valuable company on Earth (yes, Cisco).

Then the bubble burst, and it took 25 years for the stock to recover.

How did it burst? Bubbles don't pop as long as companies make money. But when demand slowed, Cisco started lending money to startups just so they could buy Cisco gear (Vendor Financing). It kept the wheel turning—until it didn't. When those startups went bankrupt, the loans defaulted. The money vanished. Cisco crashed ~80%.

Today, NVIDIA sits in the exact same seat. Did they learn from history? Hell yes.

They analyzed why Cisco failed: Lending (Debt) = Default Risk.

So NVIDIA changed the playbook: Instead of lending, they invest.

Nvidia invests billions in a customer (like CoreWeave).

The customer uses that capital to buy Nvidia chips.

The money returns to Nvidia as "revenue."

What happens if the customer goes bust? NVIDIA doesn't hold bad debt—they hold equity. They’ve already booked the sales, and if the bubble bursts, NVIDIA essentially owns the liquidated AI industry. There is no scenario where they don't benefit. If the AI industry goes up, they win. If it crashes, they own the remains. It’s incredibly clever.

It is a financial perpetual motion machine. 🔄 The money leaves as an "investment" and comes back as "revenue." They’ve even agreed to buy back unused capacity to eliminate inventory risk.

The lesson? Cisco’s error was crude (bad loans). Nvidia’s innovation is invisible (circular ownership). It's not illegal. But it implies the market’s "demand signal" is broken—we no longer know what is real demand and what is just recycled capital.

Written by Steven Nguyen

Author

Ai Base Network (ABN), ABN ASIA was founded by people with deep roots in academia, with work experience in the US, Holland, Hungary, Japan, South Korea, Singapore, and Vietnam. ABN Asia is where academia and technology meet opportunity. With our cutting-edge solutions and competent software development services, we're helping businesses level up and take on the global scene. Our commitment: Faster. Better. More reliable. In most cases: Cheaper as well.

Feel free to reach out to us whenever you require IT services, digital consulting, off-the-shelf software solutions, or if you'd like to send us requests for proposals (RFPs). You can contact us at [email protected]. We're ready to assist you with all your technology needs.