Nvidia credit risk gauge hits new peak as SoftBank readies record bond issue

AI chip startup Etched, valued at $21B, is attracting Nvidia talent and investment. Founded by Harvard dropouts, it claims faster inference workloads and has secured $1B in orders from Jane Street. Nvidia has licensed Groq's tech for $17B, acknowledging competition. Etched's valuation surge reflects investor interest in alternatives to Nvidia's architecture.

Nvidia's H200 AI chips have reportedly reached China in small shipments, with ByteDance and Tencent each receiving about 10,000 processors. The U.S. has approved purchases of up to 100,000 chips per company, but Chinese regulators prefer the hardware be used in Hong Kong to support domestic chipmakers, according to the Financial Times.

Nvidia (NVDA) is partnering with OpenAI on a data center project in Ohio, initially guaranteeing under $120 billion for the first phase. The guarantee is a residual-value backstop, not direct financing. Nvidia also plans to invest up to $1.5 billion in SB Energy's upcoming IPO, which could raise at least $5 billion. The company is expanding its role in AI infrastructure financing, partnering with firms like BlackRock (BLK) and Goldman Sachs (GS) to target over $500 billion in capital.

Nvidia, SB Energy, and OpenAI announced an AI infrastructure deal valued at $500 billion, involving 'Land, power, and shell' (LPS) capacity. The project, backed by federal plans, aims to build 10GW of power generation for data centers by 2032. Nvidia's stock initially rose 1% but later fell. OpenAI reported $40 billion in annual revenue but faces high cash burn rates.

Asian tech and chip stocks fell, led by SoftBank (9984), Renesas (6723), and Kioxia (285A) in Japan, Samsung (005930) and SK Hynix (000660) in South Korea, and SMIC (0981) and Hua Hong (1347) in Hong Kong. U.S. chip stocks like Nvidia (NVDA), Micron (MU), and SanDisk (SNDK) also declined as bond yields rose, raising valuation concerns for AI-linked companies.

NVIDIA and OpenAI will participate in SB Energy’s PORTS-Pike AI data center in southern Ohio. NVIDIA will be the exclusive compute provider, financing $105B and investing $1.5B in SB Energy. OpenAI has a 20-year lease for capacity starting at 4.25 IT-GW.