Short seller Jim Chanos warned in late 2025 that AI infrastructure was being built on leveraged financing tied to rapidly depreciating hardware. That warning is now becoming harder to ignore with Nvidia Corp (NASDAQ:NVDA) becoming a classic example of the situation.
Nvidia’s AI boom is usually framed as a semiconductor story. Behind the scenes, it is increasingly becoming a credit story.
One of Nvidia’s fastest-growing customers, CoreWeave Inc (NASDAQ:CRWV), has built its AI cloud using more than $10 billion in private credit, much of it backed by Nvidia GPUs and data center assets. Analysts estimate CoreWeave carried roughly $10.45 billion in GPU-collateralized debt, with some reports pegging total debt commitments at over $12 billion by 2025.
The financing has been layered on aggressively. CoreWeave secured a $2.3 billion GPU-backed facility in 2023, a $7.5 billion private credit facility in 2024, a $2.6 billion term loan in 2025, and $2 billion in convertible notes, largely to fund AI hardware purchases.
CoreWeave is not alone.
The GPU Debt Flywheel
AI cloud firms, including Fluidstack, Lambda, and Crusoe, have also raised billions in GPU-backed debt to expand Nvidia-powered infrastructure. Fluidstack has reportedly raised over $10 billion using Nvidia GPUs as collateral, while Lambda secured a $500 million GPU-backed loan and later entered a $1.5 billion GPU leasing deal with Nvidia. Crusoe has also taken on hundreds of millions in GPU-collateralized loans, with Nvidia supplying chips and investing in the company.
Analysts estimate the broader “neocloud” sector now carries more than $20 billion in GPU-backed debt, creating a new private-credit asset class centered on AI infrastructure.
Why This Matters for Investors
For Nvidia shareholders, the takeaway is straightforward: AI demand is increasingly tied to private credit availability, not just enterprise adoption. As lenders finance GPU buildouts, Nvidia’s revenue becomes linked to capital market conditions.
Chanos’ warning was not that AI demand is fake. It was that the buildout is highly leveraged.
The sales are real. The customers are real. The capital structure is increasingly debt-financed.
Nvidia is still a semiconductor story. But it is also becoming a private credit macro trade—and Wall Street is only beginning to price that in.
Photo: JRdes / Shutterstock
Recent Comments