Nvidia is bringing Wall Street deeper into AI infrastructure financing 
Nvidia announced that a coalition of major financial institutions, including BlackRock, Goldman Sachs, Apollo, Blackstone, Brookfield, and KKR, will independently deploy more than $500 billion to help fund AI infrastructure.
The issue investors were watching: “circular financing”. If Nvidia lends money to customers like OpenAI so they can buy Nvidia chips, and those customers fail, Nvidia could be left with the losses while already having booked the revenue.
In less than three weeks, the cost of protecting Nvidia’s debt against default had nearly doubled via credit default swaps (CDS)
Tuesday’s announcement helped calm credit markets because Nvidia’s own exposure will be limited to guaranteeing up to 25% of some projects through a “residual value mechanism”, with the rest of the risk absorbed by outside investors.
The concern has not disappeared. It has been redistributed. If projects fail, losses could flow to bondholders, life insurers, and pension holders instead of Nvidia shareholders....
