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Nvidia targets over $750 billion in AI deals amid circular financing risk
Analysts cited by LiveMint note Nvidia guarantees already total about $3.5 billion and discuss a potential $250 billion exposure tied to loans it helps back.
Nvidia is pursuing a new wave of AI deals worth more than $750 billion, a push that could expand the company’s footprint as a provider, investor, and financier in the infrastructure behind AI, LiveMint reports, citing Reuters visuals and reporting context.
The concern highlighted by multiple experts is that some of Nvidia’s arrangements could resemble circular financing, where investments or financing Nvidia provides ultimately lead back to purchases of its chips. They warn the setup could make AI demand look stronger than it would be otherwise, raising questions about the risk for investors if the underlying bets do not play out.
Viram Shah, founder and CEO of Vested Finance, distinguishes normal equity investing from a separate concern, stating the more significant exposure would be Nvidia agreeing to guarantee someone else’s loan. He points to the leverage effect of such backing, since the guarantee can make borrowing cheaper than it would be without Nvidia’s support, and he flags that the scale discussed is material.
Shah also links potential stress to lending and delivery outcomes, saying warning signs may first emerge in credit markets if loans become harder to complete at expected rates or if projects and deliveries do not match announcements. He cites Nvidia-related filings showing about $3.5 billion in guarantees today and notes examples of weaker signals elsewhere, including Oracle’s downgrade to the lowest investment grade rating and Alphabet’s negative free cash flow for the first time since going public, according to LiveMint.