Nvidia Partners with 6 Wall Street Giants to Raise $500 Billion, Sparking Market Fears Over Excessive Leverage

Nvidia, the leading AI chipmaker, is reportedly partnering with six major Wall Street financial institutions to raise $500 billion (approximately NT$16 trillion) to fund AI chip development, power production, and data center infrastructure. While this massive fundraising appears positive on the surface, it has triggered complex market reactions, causing Nvidia's 5-year credit default swap (CDS) to surge by 5.3 basis points in a single day—the largest increase in two weeks. This sharp rise indicates growing investor anxiety about potential default risks.

Financial commentator Di Xiang warned that the uncertainty surrounding the AI boom is increasing. He emphasized that investors who fail to strictly manage risk and over-leverage their positions could face forced liquidation—being 'carried out of the market.' Nvidia recently disclosed a new computing financing platform in collaboration with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR, aiming to raise over $500 billion in third-party capital for AI infrastructure.

The spike in CDS reflects a sudden surge in market participants hedging against Nvidia's potential default. In simple terms, many investors are now purchasing CDS as insurance, fearing that Nvidia might struggle to meet its financial obligations. Di Xiang noted that this market reaction reveals the AI frenzy is no longer as stable as before, with uncertainty and risks escalating rapidly.

He stressed that while market volatility often brings both crisis and opportunity, investors must maintain strict discipline and position control. Those who over-leverage due to excessive optimism may be wiped out during sharp corrections, only then realizing that 'going slow is actually faster' in investing.

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