Nvidia's move from chipmaker to financier of the global AI buildout is meeting its first serious challenge as credit markets tighten for its partners.

The company has used its investment-grade rating to backstop large projects, including guarantees on up to $105 billion for chips, land and power at a proposed 10-gigawatt OpenAI data center in Ohio. As of its July quarterly filing, Nvidia had $36 billion in off-balance-sheet AI cloud agreements for neoclouds. For most deals, Nvidia pays only if project participants default.

Pressure is showing. Shares of CoreWeave, Nebius and IREN - all cash-burning companies in Nvidia's portfolio - are down at least 30% this month. CoreWeave's credit default swap spread has climbed past 11%. Nvidia investor Firmus withdrew its IPO plans this month, while Nscale and SB Energy have filed to go public in the U.S. without recent updates.

CEO Jensen Huang said demand for neoclouds is "off the charts," adding that working capital is what's missing. Nvidia's stock is off 7.6% in October. New Constructs puts the net present value of Nvidia's off-balance-sheet liabilities above $153 billion for fiscal 2026, and Moody's says guarantees are the fastest-growing type of off-balance-sheet financing in 2026.

Source: CNBC