Nvidia's AI financing plan raises leverage concerns

Investors are questioning whether leverage has become the biggest risk behind the AI boom, as billions flow into the sector through increasingly complex financing structures. The debate intensified after the collapse of AI-focused hedge fund Situational Awareness, whose highly leveraged bets unwound following a sharp tech selloff. Nvidia is working with Wall Street firms including Apollo, Blackstone, and Goldman Sachs to unlock over $500 billion in third-party capital for AI infrastructure. Goldman estimates hyperscalers now hold roughly $1.5 trillion in combined lease commitments, with about $1 trillion classified as "non-initiated" leases not yet recognized on balance sheets. The collapse of Situational Awareness, which lost approximately 67% in July, has divided analysts on whether leverage poses systemic risk. JPMorgan CEO Jamie Dimon warned margin debt is "quite high," while others argue concentration in tech indices, not financial leverage, is the greater concern.