They could buy back stock or, God forbid, pay good old dividends to investors instead of throwing money away.

Why would paying dividends not be like throwing money away for Nvidia, considering the alternative is to reinvest it into Nvidia's R&D, hiring & training, etc. Investors are already happily making money on NVDA stock appreciation, so what more would they gain from paying dividends?

because of the law of diminishing returns

More money?