United States credit risk on Nvidia jumps sharply
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Nvidia Corporation’s credit risk climbed sharply on Monday after reports that the US-based chipmaker is in talks over more than $750 billion of artificial intelligence infrastructure deals. Five-year credit-default swaps on Nvidia, which insure against a debt default, rose intraday by as much as 0.14 percentage point to 0.82 percentage point annually, the largest move since trading in the contracts became active in November, according to ICE Data Services. The shift follows negotiations over a potential $250 billion corporate guarantee to support OpenAI data-center leasing in the United States and a separate AI partnership exceeding $500 billion with SK Hynix’s parent in South Korea.
More context
Timeline
- November 2023 Nvidia five-year CDS begin active trading
- Late last week Nvidia outlines SK Hynix partnership
- Late last week SK Hynix parent announces AI initiative
- Friday Nvidia–SK Hynix AI project exceeds $500 billion
- Monday Nvidia credit-default swap prices spike sharply
- Monday CDS cost reaches 0.82 percentage point annually
- Monday Markets assess $250 billion OpenAI guarantee
- Today Total AI deal talks surpass $750 billion
Why it matters
Nvidia's credit risk jump could affect your investments. If you hold Nvidia stocks or bonds, keep a close eye on the situation. The company's big AI deals could either boost or burden its financial health.
JQJO Editorial Desk · Human reviewed · AI assisted. Report a correction.
