NVIDIA Corporation (NASDAQ:NVDA) will invest about $1.01 billion in South Korean internet company Naver to help finance an AI data center, taking a 4.5% stake in Naver once the deal closes. Nvidia, Naver, and U.S. private equity firm Brookfield are also in talks for Brookfield to provide up to $9 billion in additional funding for the project, with Naver covering the remaining costs. Naver shares jumped 8.2% on the news.
Why Nvidia Keeps Investing in Its Own Customers
The investment deepens Nvidia’s push into Asia’s AI buildout. Just last month, NVIDIA Corporation (NASDAQ:NVDA) struck a separate series of deals with South Korean firms, including Naver and SK Group, to build large-scale AI infrastructure in the region, part of a broader effort to expand its data center footprint and extend its reach into robotics and other industrial sectors. CEO Jensen Huang said the three-way partnership is “building sovereign AI infrastructure at the scale needed to fuel Korea’s startups and industries.” For Naver, the deal funds its AI factory project and arrived the same day the company said it will cancel 1.017 trillion won of treasury shares, a separate move to boost shareholder returns.
This makes you wonder: is Nvidia’s growing habit of financing and investing in its own customers smart capital deployment, or a hidden risk building up on its balance sheet?
Nvidia’s Bull and Bear Case
Nvidia isn’t just selling chips here; it’s locking in a long-term customer relationship through equity, and it will supply the GPUs for the data center itself. NVIDIA Corporation (NASDAQ:NVDA) and Naver plan to scale the project quickly, from 55 megawatts of capacity in the first half of 2027 to 100 megawatts by the end of that year, 200 megawatts in 2028, and eventually gigawatt-scale infrastructure.
However, this is another example of Nvidia tying up its own capital in financing deals for its customers, a pattern that echoes the much larger, roughly $250 billion financing talks for OpenAI’s data center project, talks that rattled Nvidia’s own stock in late July. Brookfield’s $9 billion in funding is also still just a nonbinding term sheet, not a signed commitment, and the data center’s capacity won’t reach meaningful scale until 2027 and 2028 at the earliest.
Naver’s Bull and Bear Case
Naver shares jumped 8.2% on the Nvidia news, trimming its year-to-date losses to 7.4%, and the same-day treasury share cancellation is a separate, shareholder-friendly move on top of the AI deal. Naver already has a homegrown large language model and has played a central role in South Korea’s push for sovereign AI, giving it credibility as a partner beyond just hosting NVIDIA Corporation (NASDAQ:NVDA)’s chips.
However, Nvidia’s investment comes through newly issued shares, meaning existing shareholders take some dilution in exchange for the capital and the partnership. The project driving this deal also won’t reach meaningful scale for years, leaving Naver’s near-term results largely unaffected by the tie-up.
Insider Monkey’s Hedge Fund Data
Insider Monkey’s hedge fund database shows Nvidia had 275 hedge fund holders as of Q1 2026, well ahead of Apple Inc. (NASDAQ:AAPL)’s 170. Nvidia’s holder count grew from 264 the quarter before, while the dollar value held slipped from $89.1 billion to $83.9 billion. Apple’s holder count barely moved, up from 169.
Both trail some Magnificent Seven peers: Microsoft had 282 holders, Amazon had 353, and Alphabet had 265. Nvidia sits mid-pack among mega-cap tech stocks by hedge fund popularity, while Apple is the least popular of the group.
Conclusion
NVIDIA Corporation (NASDAQ:NVDA) is increasingly playing banker as well as chip supplier to its own customers, from a $1 billion stake in Naver to a much larger financing role in OpenAI’s data center ambitions. For Naver, the deal is a genuine vote of confidence and a stock-price boost today, but the real payoff, like Nvidia’s, is still years away.
While we acknowledge the risk and potential of NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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