The most valuable company in the world hit a new high today: Nvidia reached a $5 trillion valuation. The company’s explosive growth has been fueled by the AI boom — it makes the chips that are essential to training and deploying the models.

But Nvidia is also fueling the AI boom itself by making a slew of investments in other AI-related companies. This week it was Nokia — yes, the maker of old-school cellphones. More recently, Nokia has been a big a player in 5G networking. Nvidia is taking a $1 billion stake in the Finnish company and launching a partnership to build next generation AI mobile networks.

Nvidia’s aggressive deal-making has gotten markets excited but also raised concerns, again, about whether we’re in a bubble.

Nvidia has made dozens of investment deals just this year: $100 billion in OpenAI, $5 billion in Intel and reportedly $2 billion in XAI. It’s funded cloud providers and AI application startups.

“They're all over the place,” said analyst Stacy Rasgon at Bernstein Research. He said Nvidia is making so much money it basically just has piles of billions of dollars sitting around.

“So why not use that cash to grow and support the ecosystem of users and applications and everything else to help ensure that there is a flywheel here, that there is widespread adoption. It makes sense to me,” he said.

Rasgon said Nvidia is seeding a diverse customer base that ideally will keep buying chips. But that is what has some people concerned, said analyst Jay Goldberg at Seaport Research.

“The flip side of that is that it goes too far,” he said.

Basically, that Nvidia could end up creating kind of an artificial demand for its chips.

“Are you investing money now because you’re just financing a deal, like you're just a bank, or are you getting these customers to buy stuff they wouldn't otherwise buy?” Goldberg said.

If companies are buying Nvidia chips with the money that Nvidia gives them, but they don’t have enough customers for their products or services, we could end up with a finance crunch.

Like what happened in the telecom crash of the late ‘90s and early 2000s, said Jeffrey Sonnenfeld, a management professor at Yale. 

“The capacity was mushrooming, but the use wasn't. They got way ahead of it,” he said.

The equipment companies were lending money to telecom startups to turn around and buy their products — an arrangement called vendor financing.

“So that it had an illusion of a surge, when it was really much more of a bubble,” he said.

When it popped, dozens of companies went bankrupt. And the glut of fiber-optic infrastructure took more than a decade to be utilized.