BlockBeats News, July 28th, according to Bloomberg, after NVIDIA was revealed to be advancing a deal worth over $750 billion in AI infrastructure, the cost of protecting its debt from default saw a record single-day spike on Monday. ICE Data Services data showed that NVIDIA's 5-year CDS price rose by around 14 basis points at one point, peaking at around 82 basis points annually, indicating the credit market has begun to reprice its potential guarantees and financing obligations.

CDS, or Credit Default Swap, can be understood as a type of "debt default insurance": investors regularly pay a fee in exchange for protection that pays out in the event of a debtor default. Therefore, a higher CDS price usually means the market believes the related company's debt risk is higher, or investors are more cautious about its debt repayment prospects. Taking NVIDIA as an example, a rise in the 5-year CDS indicates that some funds are starting to pay a higher cost for protection against its future potential debt pressure or guarantee obligations, reflecting the market's growing concern about the financing risk behind the massive AI transaction.

On the news front, NVIDIA is reportedly in discussions to provide up to $250 billion in guarantees to help OpenAI lease computing power for the U.S. data center project; at the same time, the company disclosed last Friday a cooperation scale with South Korea's SK hynix parent company SK Group exceeding $500 billion. The market's focus is on the continued strong demand for AI computing power, but as chip suppliers begin to finance or endorse customers, investors' doubts about demand quality, balance sheet risks, and the sustainability of AI capital expenditures are intensifying.

The market has already reacted. On July 27th, the NVIDIA fell by about 5% in the U.S. Eastern Time, dragging the Nasdaq down by 0.2%; the S&P 500 was basically flat, while the Dow rose by 0.5%. Ahead of the super tech stock earnings week and the Fed interest rate meeting, the sensitive point of AI trading is shifting from "how fast is the growth" to "who is paying for this round of growth."

Michael J. Kramer, macro analyst and founder of Mott Capital, said that the rise in CDS indicates that the market's awareness of NVIDIA and the entire AI industry chain (including Oracle, AMD, Broadcom, etc.) default risk is increasing, reflecting credit investors' cautious attitude towards large-scale AI capital expenditures and potential leverage, and this risk signal has not yet been fully digested by the optimistic stock market. He even bluntly stated that the credit market has been reminding about the sustainability of the AI investment cycle, while stock investors seem not to have noticed.

Renowned Chinese macroeconomist Fu Peng said that a few years ago, when the market was confident, spending money (free cash flow decline) meant seizing the future, but now, the more money burned, the more it means worry; a few years ago when the market was confident, the "left-handedly pouring into the right hand" strategy brought about higher binding, and the more everyone thought the scale would rapidly expand, but now, the higher the binding, the more it begins to mean that there may be a catastrophic event in the future.