- Nvidia has promised to cover up to $108.5B in data center leases, about $105B of it tied to OpenAI’s planned Ohio campus, and those contracts remain in force.
- Shares fell about 14% after CEO Jensen Huang resigned Thursday, and AI cloud tenants such as CoreWeave and Nebius dropped 13.6% and 20% in early trading.
- Nvidia’s investments, from power developers to a $500B financing pledge, may be reconsidered, and Tuesday’s earnings call will be the first test without Huang.
Nvidia’s data center lease guarantees are signed contracts that outlast its CEO, but its credit and appetite for backing developers are now being tested, according to Bisnow’s analysis.
Jensen Huang resigned as CEO Thursday and left the board, Bisnow reported, citing a securities filing. CFO Colette Kress is interim CEO.
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What Nvidia Still Owes
Nvidia stands behind as much as $108.5B in leases if some tenants fail to pay, according to Bisnow. Roughly $3.5B supports smaller AI cloud firms. The remaining amount, up to $105B, backs OpenAI’s planned Ohio campus, which SB Energy will develop.
The Ohio backstop applies only if OpenAI defaults. It also requires that the buildings cannot be re-leased or sold at full value. The first buildings are slated for delivery in 2028.
Credit and Contagion
Protection against a Nvidia default now costs about triple its midsummer level. However, the cost remains roughly half Oracle’s price.
On a webinar, LightBox’s Manus Clancy warned that a credit scare could push CMBS spreads wider.
Tenants Feel It First
CoreWeave fell 13.6% and Nebius dropped 20% in early Thursday trading. Nvidia shares also fell about 14%, wiping out roughly $590B in value.
Nvidia holds the second-biggest stake in CoreWeave. It also committed to buying up to $6.3B of the company’s unused computing capacity through April 2032.
The ‘Bank of Nvidia’
Nvidia held $99B in stakes in other firms in July and has promised another $25B. It also made a $500B Wall Street financing pledge. However, its own filing says that pledge may never reach final approval.
The company has also expanded into power and land. Its reported investments include SB Energy, Cloverleaf and Lancium, the developer behind OpenAI’s Abilene campus.
Zoom Out
Lenders were already getting cautious. We covered how AI data center debt yields hit double digits as buyers balked.
Still, capital continues to flow. Brookfield raised $25B in Q3 as infrastructure demand surged.
What’s Next
Nvidia reports earnings Tuesday. It will be its first call without Huang, according to Bisnow. The board has retained a search firm to find a permanent chief.
The largest space users, Microsoft, Amazon and Meta, sit outside Nvidia’s governance. Bernstein’s Stacy Rasgon said the underlying business remains sound.
