Nvidia to provide up to $105 billion backstop for OpenAI data center
Nvidia reached a deal on Monday to provide up to $105 billion to backstop a new OpenAI data center in Ohio, as Big Tech ramped up its debt-fueled AI splurge.
Nvidia has reached a deal to provide up to $105 billion in backing for a new OpenAI data center in Ohio, as large technology companies continue to increase their debt in pursuit of AI advancements. Analysts have noted that this growing debt, held off the balance sheets of hyperscalers, is becoming increasingly complex, making it difficult for investors to accurately assess the total potential leverage of these companies.
This trend is raising concerns about a potential "reverse-crowding-out effect," where private borrowing is making government debt more expensive, leading to higher US bond yields. Additionally, a correction in US tech stocks is likely even if AI ultimately fulfills investor expectations, and such a correction could potentially threaten stability in the Eurozone.
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