Brendan Fagan, a strategist at Bloomberg Markets Live, stated that Nvidia's plan to partner with Wall Street to finance approximately $500 billion in AI infrastructure underscores the increasing reliance of AI development on credit instruments such as debt and structured financing, and the credit market has begun to repric this. While Nvidia's CDS rose from approximately 40 basis points to 77.5 basis points, which is not inherently crisis-level, this relative widening, given the stable investment-grade spreads in the broader market, indicates that the credit market has begun to independently increase the risk premium of the AI financing chain, impacting the ultimate return on AI investments.
