Nvidia's AI financing push raises new questions about market leverage risks

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, following the collapse of the AI-focused hedge fund Situational Awareness. Nvidia is partnering with firms like Apollo, Blackstone, and Goldman Sachs to provide over $500 billion in third-party capital for AI infrastructure, while hyperscalers now hold an estimated $1.5 trillion in combined lease obligations, up from $200 billion five years ago. The Situational Awareness fund lost roughly 67% in July due to concentrated, leveraged positions, though analysts are divided on whether this signals systemic risk or isolated poor management.