San Francisco: US chipmaker Nvidia has pushed back against growing criticism from analysts and investors about its soaring valuation and business practices. The company sent a memo to financial analysts this week defending its operations after some critics compared its rapid rise to past corporate failures such as Enron and WorldCom.

Nvidia is currently valued at more than four trillion dollars, making it one of the most valuable companies in the world and a central player in the global artificial intelligence boom. However some investors have questioned whether its growth is sustainable and whether demand for high end AI chips will remain strong in the coming years.

In its memo Nvidia rejected claims that it relies on risky accounting tactics or financial structures. The company said it does not use special purpose vehicles or hidden financing arrangements and stated that its financial reporting is transparent and compliant with regulations.

The memo also attempted to address concerns that Nvidia helps fund startups that then purchase its chips creating what some critics describe as a circular demand loop. Nvidia said such claims misunderstand how investments and partnerships in the AI sector work.

One point Nvidia did acknowledge was rising costs linked to its newest Blackwell generation chips. The company said margins on the new products are lower because the chips are more complex and expensive to produce but argued that long term demand remains strong.

The memo comes after investor Michael Burry known for predicting the 2008 financial crisis publicly questioned whether Nvidia shares are overvalued. He repeated his concerns this week saying the company did not fully respond to fears about rapid chip depreciation and competition from companies like Google and AMD.

Despite the criticism many analysts still believe Nvidia will continue to lead the AI hardware market. Demand from cloud companies automakers and robotics firms remains high though some expect competition to intensify as rivals develop their own AI processors.

For now Nvidia is attempting to calm investors and maintain confidence as the debate over the future of artificial intelligence and its financial impact continues to grow.