Continued expansion in AI investment raises concerns Nvidia (NVDA.US) credit default swap recorded the biggest single-day increase in history

The Zhitong Finance App learned that after it became known in the market that Nvidia (NVDA.US) was negotiating an artificial intelligence (AI) infrastructure cooperation project with a total scale of more than 750 billion US dollars, investors' concerns about its potential financial commitments heated up, and the company's credit default swap (CDS) price recorded the biggest one-day increase on record on Monday.

According to ICE Data Services data, Nvidia's five-year credit default swap price once rose by about 0.14 percent to about 0.82% on Monday, the biggest intraday increase since the contract was actively traded in November last year. This means that the costs investors are paying to hedge against the risk of default on Nvidia's debt have risen markedly.

As of press time, Nvidia has yet to respond to the news.

According to reports, Nvidia is negotiating a financing arrangement with OpenAI to provide guarantees for US data center projects worth up to 250 billion US dollars to help OpenAI lease computing power resources. This will be one of the largest customer financing partnerships in Nvidia's history.

In addition, Nvidia also announced on Friday that it is collaborating with the parent company of South Korean chipmaker SK Hynix (SKHY.US), an AI infrastructure project with a total scale of over 500 billion US dollars.

Analysts believe that as investment in AI infrastructure continues to expand, the market is beginning to pay attention to Nvidia's possibility of assuming more financing and guarantee obligations. This is also an important reason why the company's credit default swap prices have risen sharply. Although higher CDS does not mean that the market expects the company to default, it reflects that investors are demanding higher risk compensation for their potential financial risks.