Nvidia's AI financing push raises market leverage concerns

Investors are questioning whether leverage has become the primary risk behind the AI boom, as billions flow into chips, data centers, and computing infrastructure through increasingly complex financing structures. The debate intensified after the collapse of AI-focused hedge fund Situational Awareness. Nvidia is partnering with Apollo, Blackstone, BlackRock, Brookfield, KKR, and Goldman Sachs to unlock over $500 billion in third-party capital for AI infrastructure. Goldman Sachs estimates hyperscalers now hold about $1.5 trillion in total leasing commitments, with roughly $1 trillion classified as uncommenced leases not yet on balance sheets. The Situational Awareness fund, founded by former OpenAI researcher Leopold Aschenbrenner, lost approximately 67% in July after concentrated positions in stocks like Bloom Energy and SanDisk declined sharply. Analysts remain divided on whether leverage poses a systemic threat or represents isolated risk mismanagement.