Nvidia Shares Fall as $750 Billion AI Deals Trigger Circular Financing Fears

Wall Street traders watched red lights flash on their screens on July 27, as bloomberg.com pushed forward with an aggressive expansion of artificial intelligence agreements. The chipmaker’s five-year credit default swap spread surged 14 basis points in a single day to reach 82 basis points, marking its largest single-day jump since the contract began trading in November 2025. On the same day, Nvidia shares fell 5%, erasing roughly $250 billion in market value and allowing Apple to reclaim the title of the world’s most valuable company with a valuation of 4.93万亿美元.

Decoding the $750 Billion SK Group and OpenAI Pipeline

The market selloff was directly triggered by corporate announcements that accelerate investments skeptics warn are artificially inflating valuations. Chief among them is a partnership with South Korean conglomerate SK Group, unveiled late in the week, which will see the two companies engage in more than $500 billion in business with each other.

In addition to the SK Group agreement, Nvidia is in talks to backstop as much as $250 billion to assist OpenAI in leasing computing power from a United States data center project. Together, these two initiatives total over $750 billion—a scale roughly equal to 3.5 times Nvidia’s projected revenue for fiscal 2026.

Mapping the Mechanics of Circular Financing

The transactions follow a circular loop that has drawn sharp criticism from market analysts and prominent short-sellers. Because OpenAI lacks an investment-grade credit rating while it continues to burn cash, Nvidia’s financial backing acts as the crucial safety net enabling creditors to fund the massive infrastructure project.

The project itself is being developed by SB Energy, a subsidiary of SoftBank, located in Piketon, Ohio. Planned with a massive 10-gigawatt capacity—enough to power 800万户美国家庭用电—the total investment is projected to exceed $500 billion. Industry estimates indicate that GPU procurement alone will account for a massive chunk of those billions. When factoring in separate discussions for a potential 3500亿美元 chip-采购 financing agreement with OpenAI, Nvidia’s total exposure to a single customer could reach 6000亿美元 against its own 2160亿美元 annual revenue.

Prominent market voices did not mince words. Known short-seller Jim Chanos offered a blunt assessment on social media regarding the financing structure.

We’ve reached the stage of the cycle where Nvidia has to provide financing guarantees for two-thirds of the cost of the chips it sells to data centers?! Lol, okay. Jim Chanos, via news.qq.com

Executive Defenses and Credit Risk Realities

Nvidia leadership has aggressively pushed back against allegations of artificial demand generation. Jensen Huang dismissed such characterizations when addressing investments in companies like CoreWeave earlier in January.

This is only a small fraction of the total amount of capital they need to raise ultimately. To think that this is circular—that assertion is absurd. Jensen Huang, via news.qq.com

Huang has maintained that investments in firms such as OpenAI and Anthropic spur essential industry development while generating healthy returns. Yet, despite leadership assurances, the broader financial markets are visibly shifting their focus from raw earnings growth to underlying credit exposure.

Now we have to look at CDS, not EPS. Societe Generale analyst, via news.qq.com

As the narrative pivots from raw computing power demand to ledger scrutiny, the central question remaining for Wall Street is simple: if OpenAI fails to commercialize products capable of paying off these multi-billion-dollar commitments, who ultimately absorbs the loss—the guarantor Nvidia, SoftBank, or the lending banks?