> hence I end up with $100 worth of stock in your company and it only cost me $25.

You also lost out on $75 worth of cash revenue (opportunity cost from selling the same thing to a different customer), so really you just took stock in lieu of cash.

It'd be different if Nvidia (TSMC) had excess production capacity, but afaik they're capped out.

So it's really just whether they'd be selling them to OpenAI and getting equity in return or selling to customers and getting cash in return.

If OpenAI thinks their own stock is valued above fundamentals, it's a no brainer to try and buy Nvidia hardware with stock.

In that case, you spent $80 to produce an item and exchanged it for $100 worth of their stock.

Now if you check, these companies selling their stock like this tend to have large amounts of debt. If their stock becomes worthless, you just wasted $80 producing an item that their creditors have first dibs on. And liquidating your shares immediately to ensure your gain, would weigh on their stock's value, potentially to the point where their stock would be only $80 worth, and you wouldn't be gaining anything anymore. Your earnings would then tank, alongside them.

> I give you $100 cash and you give me $100 worth of stock in return. Now you give me $100 cash to buy something from me that cost me $80 to produce. I end up with $100 worth of stock in your company which cost me only $80. No?

Sure, but how's that a cheat code? If you normally sell something for $100 that costs $80 to make, and then use that $100 revenue to buy $100 of stock, this is an identical outcome for you.

Aaaannd get to claim the 100 as revenue to show investors that the company is performing better than if I had not made the deal, which also means that demand for the product stays inflated which also means I can keep my margins higher by not needing to discount my product.