Investors were already concerned about roughly $70 billion of off‑balance‑sheet
"shadow liabilities" that could surface ahead of NVIDIA's announcement this week
of a high‑profile $500 billion financing partnership. NVIDIA may provide tens of
billions of dollars in residual‑value support to back tied debt to AI
infrastructure, effectively using its stronger credit to lower customers'
financing costs; Broadcom and other chipmakers are using similar guarantee
structures. These deals typically use an SPV to borrow to buy chips, with loans
secured by cash flows from contracts; assets are re‑leased or sold if a borrower
stops paying and the guarantor fills any deficit. Some investors say the
arrangements amount to financial engineering that can mask true liabilities.
DoubleLine portfolio manager Mariya Entina warned the structures seek favorable
treatment from ratings agencies and can obscure companies' real financial
positions.
