Jensen Huang’s sudden departure has put Nvidia’s “AI circular financing machine,” worth more than $500.000.000.000 and built on equity investments, guarantees, and share buybacks, at risk of grinding to a halt. Goldman Sachs, UBS, and 14 other institutions have successively cut their price targets, warning that if Nvidia stops funneling money to customers and suppliers—even temporarily—it could instantly drain more than $50.000.000.000 in liquidity, equivalent to triggering an “AI version of quantitative tightening.” As a result, CoreWeave, which relies heavily on Nvidia’s credit guarantees, plunged 11% that day, and an ongoing $4.000.000.000 loan backed by Nvidia faces uncertainty.
For the past three years, Nvidia has effectively played the role of “lender of last resort” for the AI industry. Through the circular logic of buying chips, financing buyers, and backing landowners, it has built up a vast footprint that includes $99.000.000.000 in equity investments, $108. 5.000.000.000 in guarantees, and $56.000.000.000 in repurchase agreements. This model has packaged fast-growing cloud service providers with low credit quality (Neoclouds) as investment-grade borrowers. After the operator’s departure, some customers and Wall Street partners began demanding renegotiated terms and higher backstop ratios, meaning credit spreads across the downstream supply chain will widen across the board. Nvidia’s once immensely popular $500.000.000.000 financing platform has now been stalled for three months without closing a single deal.
On November 17, interim CEO and CFO Colette Kress will lead the earnings call. Kress once tried to limit high-risk guarantee deals during a period of rapid growth, and now the market is holding its breath: will “Nvidia Bank,” after losing Jensen Huang, continue to operate, or quietly switch into stock-maintenance mode?
$BTC
For the past three years, Nvidia has effectively played the role of “lender of last resort” for the AI industry. Through the circular logic of buying chips, financing buyers, and backing landowners, it has built up a vast footprint that includes $99.000.000.000 in equity investments, $108. 5.000.000.000 in guarantees, and $56.000.000.000 in repurchase agreements. This model has packaged fast-growing cloud service providers with low credit quality (Neoclouds) as investment-grade borrowers. After the operator’s departure, some customers and Wall Street partners began demanding renegotiated terms and higher backstop ratios, meaning credit spreads across the downstream supply chain will widen across the board. Nvidia’s once immensely popular $500.000.000.000 financing platform has now been stalled for three months without closing a single deal.
On November 17, interim CEO and CFO Colette Kress will lead the earnings call. Kress once tried to limit high-risk guarantee deals during a period of rapid growth, and now the market is holding its breath: will “Nvidia Bank,” after losing Jensen Huang, continue to operate, or quietly switch into stock-maintenance mode?
$BTC